$50,000 Loan Is to Be Amortized Over 7 Years, with Annual

question 146

Multiple Choice

$50,000 loan is to be amortized over 7 years, with annual end-of-year payments.Which of these statements is CORRECT?

• A)The annual payments would be larger if the interest rate were lower.
• B)If the loan were amortized over 10 years rather than 7 years, and if the interest rate were the same in either case, the first payment would include more dollars of interest under the 7-year amortization plan.
• C)The proportion of each payment that represents interest as opposed to repayment of principal would be lower if the interest rate were lower.
• D)The last payment would have a higher proportion of interest than the first payment.
• E)The proportion of interest versus principal repayment would be the same for each of the 7 payments.

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Definitions:

Acquisitive Panic

A mass, irrational rush to purchase goods, often fueled by fear, scarcity, or social influence, leading to shortages and market disruption.

Collective

Pertaining to a group or assembly of people acting together for a common purpose or goal.

Groupmind

A concept describing the collective consciousness or shared intelligence of a group, often leading to unified decision-making.

Collective Movements

Organized group actions aimed at achieving a common goal, often related to social, political, or environmental change.