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

question 78

Multiple Choice

Which of the following statements regarding a 30-year monthly payment amortized mortgage with a nominal interest rate of 10% is CORRECT?

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

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Definitions:

Tort Law

An area of law that deals with civil wrongs and damages, not arising out of contractual obligations, that one party suffers at the hands of another.

Product Liability

The legal responsibility that manufacturers or sellers have to compensate for harm caused by defective or dangerous products.

Tort Law

A segment of law that addresses, rectifies, and provides remedies for civil wrongs not arising out of contractual obligations.

Privity of Contract

The relationship between parties in a contract that confers rights and obligations.