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.

---

Definitions:

Expenses

The outflow of money or other resources from a person or company to pay for goods or services.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenue and expenses to show net income or loss.

Revenues

The income generated from normal business operations and includes discounts and deductions for returned merchandise.

Expenses

Outflows of resources or incurrences of liabilities that result in a decrease in the equity of a company, other than distributions to owners.