As Applied to Mortgage Loans,which of the Following Statements Is

question 3

Multiple Choice

As applied to mortgage loans,which of the following statements is FALSE?

• A)Advertised rates are EARs.
• B)A spreadsheet uses the periodic interest rate,not the annual percentage rate.
• C)It is essential to know the compounding periods per year in order to use the TVM equations or determine the actual cost to rent money.
• D)A mortgage problem is an annuity problem.

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Definitions:

Liability

Anything owed to creditors—the claims of a company’s creditors.

Creditors

Individuals or institutions to whom money is owed by a debtor or borrower.

Business

Organizational entities that are involved in the trade of goods, services, or both to consumers, with the primary purpose of earning profits.

Owners' Equity

The residual interest in the assets of an entity after deducting liabilities, essentially the net worth belonging to the owners.