Assuming All APRs Equal, the Effective Interest Rate on a Loan

question 14

Multiple Choice

Assuming all APRs equal, the effective interest rate on a loan is highest when:

• A) The loan has no points and a 30 year maturity and is prepaid in five years
• B) The loan has no points and is prepaid at maturity
• C) Points are charged and the loan is paid off at maturity in 30 years
• D) Points are charged and the loan has a 30 year maturity but prepaid in five years

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Definitions:

Generativity

A concern for establishing and guiding the next generation, often expressed through parenting or other forms of caregiving.

Levinson

A surname that might refer to Daniel Levinson, a psychologist known for his theory on human development stages.

Life Structure

In Levenson’s theory, a person’s overall organization of their life, particularly dreams, goals, and relationships with significant others as well as institutions, such as marriage, family, and vocation.

Generativity

A concern for establishing and guiding the next generation, often shown through parenting, teaching, mentoring, and contributing positively to society.