Suppose You Have Taken Out a $400,000 Fully-Amortizing Fixed Rate

question 19

Multiple Choice

Suppose you have taken out a $400,000 fully-amortizing fixed rate mortgage loan that has a term of 15 years and an interest rate of 3.75%. In month 1 of the mortgage, how much of the monthly mortgage payment does the interest portion consist of?

• A) $9.09
• B) $1,250.00
• C) $1658.89
• D) $2,908.89

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Definitions:

Osmotic Thirst

Osmotic thirst is a sensation of thirst aroused by a high concentration of solutes in the body's fluids, leading to a drive to consume water to dilute these solutes.

Water Intoxication

A potentially fatal disturbance in brain function that results when the normal balance of electrolytes in the body is pushed outside safe limits by overhydration.

Dehydrated

A state in which the body loses more fluids than it takes in, leading to an imbalance of water and electrolytes.

Irregular Heartbeat

A condition where the heart's natural rhythm is disrupted, leading to irregularities in heart rate or rhythm.