Which of the Following Statements Regarding a 15-Year (180-Month)

question 27

Multiple Choice

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

• A) The remaining balance after three years will be $125,000 less one third of the interest paid during the first three years.
• B) Because it is a fixed-rate mortgage, the monthly loan payments (which include both interest and principal payments) are constant.
• C) Interest payments on the mortgage will increase steadily over time, but the total amount of each payment will remain constant.
• D) The proportion of the monthly payment that goes towards repayment of principal will be lower 10 years from now than it will be the first year.
• E) The outstanding balance declines at a slower rate in the later years of the loan’s life.

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Definitions:

Statement of Purpose

A written document that outlines an individual's intentions, goals, and reasons for applying to a specific program, job, or opportunity.

Scope of the Report

Defines the boundaries and coverage of the report, including what will and will not be addressed within the document.

Interpreting Data

The process of analyzing and making sense of data to draw meaningful conclusions or insights.

Facts

Objective statements or pieces of information based on real occurrences or verified data.