Question

match each term to its description.
promissory note collateral principal
an asset that a borrower offers to secure a loan
the amount of money that is borrowed and must be repaid
a legal document in which the borrower agrees to pay the lender

Explanation:

1. For "an asset that a borrower offers to secure a loan", the term is "collateral" as collateral is an asset pledged to secure a loan.
2. For "the amount of money that is borrowed and must be repaid", the term is "principal" as principal refers to the original sum borrowed.
3. For "a legal document in which the borrower agrees to pay the lender", the term is "promissory note" as a promissory note is a legal document for borrower - lender payment agreement.

Answer:

• "an asset that a borrower offers to secure a loan" → collateral
• "the amount of money that is borrowed and must be repaid" → principal
• "a legal document in which the borrower agrees to pay the lender" → promissory note