Which of the Following Statements Regarding a 20-Year Monthly Payment

question 118

Multiple Choice

Which of the following statements regarding a 20-year monthly payment amortized mortgage with a nominal interest rate of 10% is CORRECT?

• A) Exactly 10% of the first monthly payment represents interest.
• B) The monthly payments will increase over time.
• C) A larger proportion of the first monthly payment will be interest, and a smaller proportion will be principal, than for the last monthly payment.
• D) The total dollar amount of interest being paid off each month gets larger as the loan approaches maturity.
• E) The amount representing interest in the first payment would be higher if the nominal interest rate were 7% rather than 10%.

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Definitions:

Erythroblastosis Fetalis

A potentially fatal condition in newborns due to incompatibility between maternal and fetal blood types.

RhoGAM

A medication used to prevent Rh incompatibility issues in pregnancies by stopping the mother's immune system from attacking the baby's red blood cells.

Rh-negative

A blood type classification indicating the absence of Rh factor, a protein on the surface of red blood cells.

Hemoglobin

Hemoglobin is a protein in red blood cells responsible for transporting oxygen from the lungs to the rest of the body and returning carbon dioxide back to the lungs.