Suppose You Have Taken Out a $200,000 Fully-Amortizing Fixed Rate

question 9

Multiple Choice

Suppose you have taken out a $200,000 fully-amortizing fixed rate mortgage loan that has a term of 15 years and an interest rate of 4.25%. In month 2 of the mortgage, how much of the monthly mortgage payment does the principal repayment portion consist of?

• A) $705.51
• B) $708.33
• C) $796.22
• D) $799.04

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Definitions:

Independent And Dependent Variables

Variables in an experimental setup where the independent variable is manipulated to observe its effect on the dependent variable.

Control Variable

A variable that is kept constant or monitored to minimize its effect on the outcome of the experiment.

Observational Research

A research method where the researcher observes subjects in their natural environment without intervention.

Phenomenon Manipulate

Direct alteration or control exerted over phenomena to investigate causal relationships.