Amir Has Obtained a $250,000 Mortgage

question 51

Multiple Choice

Amir has obtained a $250,000 mortgage.The mortgage is amortized over 25 years and the term of the mortgage is 25 years.The mortgage interest rate is 9% compounded annually.Amir will begin making annual payments of $25,451.56 at the end of the year.What is the principal outstanding immediately after Amir makes his third payment?

• A)$50,903.12
• B)$173,645.32
• C)$185,574.60
• D)$240,324.46

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Definitions:

Incremental Processing Costs

Additional costs incurred when increasing the production volume or when processing further beyond the split-off point.

Sell or Process Further

A decision-making process in cost accounting where a company must determine whether to sell a product as is or continue processing to add value.

Annual Rate of Return

The percentage return on an investment over a one-year period, encompassing both capital gains and interest payments.

Expected Annual Net Income

The projection of a company's net income over a year, taking into account estimated revenues and expenses.