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

question 76

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 decline over time.
• B)A smaller proportion of the last monthly payment will be interest, and a larger proportion will be principal, than for the first monthly payment.
• C)The amount representing interest in the first payment would be higher if the nominal interest rate were 7% rather than 10%.
• D)Exactly 10% of the first monthly payment represents interest.

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Definitions:

Oligopoly

The market structure that exists when there are very few businesses selling a product.

Economic Depression

A severe and prolonged downturn in economic activity characterized by significant decline in GDP, high unemployment, and deflation.