A Short-Term Mortgage with a Very Large Final Payment Is

question 67

Multiple Choice

A short-term mortgage with a very large final payment is called a ____________ mortgage.

• A)balloon
• B)graduated-payment
• C)growing-equity
• D)shared-appreciation
• E)negative-amortization

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Definitions:

Straight-Line Method

A depreciation method that allocates an equal portion of the cost of a fixed asset to each accounting period over its useful life.

Amortization

The process of gradually reducing the cost of an intangible asset through scheduled periodic payments over its useful life.

Annual Interest Expense

Annual Interest Expense refers to the total cost incurred by an entity over a fiscal year for borrowing funds, encompassing interest payments on loans, bonds, and other forms of debt.

Semiannually

Occurring or done twice a year, typically every six months.