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Roundwell Motors purchases a manufacturing plant for $15 million, pays $5 million in cash as down payment, and borrows the remaining $10 million from Home Providence Bank. To secure the loan, Roundwell gives the plant as collateral to Home Providence Bank. What kind of collateral arrangement is in place between Roundwell Motors and Home Providence Bank?

Respuesta :

jepessoa

Answer:

mortgage

Explanation:

A mortgage is the most common type of loan when someone buys a house or apartment. Your bank lends you money and in exchange it takes the property title of your house or apartment as collateral until you finish paying your debt. The same applies for businesses that need to buy real property.

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