You Have a 30-Year Mortgage with a Simple Annual Interest

question 87

Multiple Choice

You have a 30-year mortgage with a simple annual interest rate of 8.5 percent.The monthly payment is $1,000.What percentage of your total payments over the first three years goes toward the repayment of principal?

• A) 1.50%
• B) 3.42%
• C) 5.23%
• D) 6.75%
• E) 8.94%

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Definitions:

Sherman Act

A foundational U.S. antitrust law aimed at maintaining competition by prohibiting monopolies, cartels, and other forms of restrictive trade practices.

Monopoly Power

The ability of a single firm to control the market price and output of a good or service due to lack of competition.

Alcoa Case

A landmark antitrust case in which the Aluminum Company of America (Alcoa) was found to have monopolized the production and sale of aluminum, violating the Sherman Act.

Federal Trade Commission

A federal agency established to prevent fraudulent, deceptive, and unfair business practices in the marketplace.