Which of the Following Statements Regarding a 15-Year (180-Month) $125,000

question 76

Multiple Choice

Which of the following statements regarding a 15-year (180-month) $125,000 fixed-rate mortgage is INCORRECT? (Ignore all taxes and transactions costs.)

• A) The remaining balance after 3 years will be $125,000 less the total amount of interest paid during the first 36 months.
• B) Because it is a fixed-rate mortgage, the monthly loan payments (which include both interest and principal payments) are constant.
• C) The proportion of the monthly payment that goes toward repayment of principal will be higher 10 years from now than it will be the first year.
• D) The outstanding balance gets paid off at a faster rate in the later years of a loan's life.

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