Why Is There a Penalty for Early Repayment of Fixed-

question 55

Essay

Why is there a penalty for early repayment of fixed- rate mortgages?

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Definitions:

General Fund

A primary operating fund used by governments to finance regular, day-to-day services and activities.

Endowment Fund

A fund established to maintain principal inviolate and to use earnings for specific purposes, often found in non-profit or educational institutions.

Fund Accounting

A system of accounting used primarily by non-profit or governmental organizations where resources are categorized into funds according to their designated purpose or restrictions.

Not-for-Profit Organizations

Entities that operate for purposes other than generating profit, focusing instead on social, educational, or charitable objectives.