Which of the Following Statements Regarding a 15-Year (180-Month) $125,000

question 35

Multiple Choice

Which of the following statements regarding a 15-year (180-month) $125,000 fixed-rate mortgage is NOT correct? (Ignore all taxes and transaction costs.)

• A)The remaining balance after 3 years will be $125,000 less the total amount of interest paid during the first 36 months.
• B)Because it is a fixed-rate mortgage, the monthly loan payments (which include both interest and principal payments) are constant.
• C)The proportion of the monthly payment that goes toward repayment of principal will be higher 10 years from now than it will be the first year.
• D)The outstanding balance gets paid off at a faster rate in the later years of a loan's life.