Which of the Following Statements Regarding a 30-Year Monthly Payment

question 116

Multiple Choice

Which of the following statements regarding a 30-year monthly payment amortized mortgage with a nominal interest rate of 8% is CORRECT?

• A) Exactly 8% of the first monthly payment represents interest.
• B) The monthly payments will decline over time.
• C) A smaller proportion of the last monthly payment will be interest, and a larger proportion will be principal, than for the first monthly payment.
• D) The total dollar amount of principal being paid off each month gets smaller as the loan approaches maturity.
• E) The amount representing interest in the first payment would be higher if the nominal interest rate were 6% rather than 8%.

---

Definitions:

Macroeconomic Equilibrium

A state in which aggregate supply equals aggregate demand, leading to an economy operating at its full capacity.

Aggregate Purchases

The total amount of goods and services bought in an economy over a specific period of time.

Average Price Level

A measure of the overall level of prices of goods and services in an economy over a period of time.

Imports and Exports

Transactions involving the buying (imports) and selling (exports) of goods and services between countries.