Sienna has a car loan with an annual interest rate of 4.8%. She will make the same monthly payment for 48 months, after which the loan will be paid back. Diego says that Sienna’s loan is an example of closed-end credit while Sienna says it is an example of open-end credit. Which statement about the loan is true?
Answer
D
Diego is correct because the loan has to be paid in full by a specific date.
S
Sienna is correct because she had to pledge collateral to get the loan.
S
Sienna is correct because the amount can be borrowed again after she repays the loan.
D
Diego is correct because the loan is a line of credit.