What Effect Does Paying an Extra Small Bit of Principal

question 53

Multiple Choice

What effect does paying an extra small bit of principal on a mortgage have on the life of a 30 year loan?

• A)It has no impact on amount of interest paid but shortens the length of the loan.
• B)It saves money in interest and shortens the length of the loan.
• C)It increases the amount of interest paid and lengthens the length of the loan.
• D)It has no impact on either interest or life span of the loan.

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Definitions:

Shield

A vast geological area composed of old, stable, and typically flat Precambrian rock, often found on continents.

Mount St. Helens

Mount St. Helens is an active volcano located in the state of Washington, USA, known for its major eruption on May 18, 1980.

Cascade Range

A major mountain range of western North America, extending from southern British Columbia through Washington and Oregon to Northern California.

Crater Lake

A lake that forms in a volcanic crater or caldera after the volcano becomes inactive and the crater or caldera fills with precipitation or melted snow.