Which of the Following Would Increase the Speed of Equity

question 32

Multiple Choice

Which of the following would increase the speed of equity growth for a homebuyer?

• A)making a down payment of 10 percent instead of 20 percent
• B)obtaining a mortgage interest rate of 9 percent instead of 8 percent
• C)obtaining a 20-year mortgage instead of a 25-year mortgage
• D)making larger deposits to the escrow account
• E)making smaller deposit to the escrow account

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Definitions:

Equity Method

An accounting technique used to record investments in other companies, recognizing equity changes proportionately.

Deferred Taxes

Taxes that are assessed or levied for one period but deferred to a future period for payment.

Consolidated Balance Sheet

A financial statement that combines the assets, liabilities, and equity of a parent company and its subsidiaries into one document to provide a comprehensive overview of the financial position of the entire group.

Tax Rate

The percentage rate at which an individual or corporation is taxed.