Which of the Following Statements Is Correct

question 95

Multiple Choice

Which of the following statements is correct?

• A) A 15-year mortgage will have larger monthly payments than a 30-year mortgage.
• B) If an account earns 3 percent per year compounded annually, then it also has an effective annual rate (EAR) of 3 percent.
• C) The present value of a $500 perpetuity is greater if the interest rate is higher.
• D) The first, second, and third statements above are correct.
• E) Only the first and second, statements above are correct.

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