Which of the Following Statements Regarding a 15-Year (180-Month) $225,000

question 125

Multiple Choice

Which of the following statements regarding a 15-year (180-month) $225,000, fixed-rate mortgage is CORRECT? (Ignore taxes and transactions costs.)

• A) The outstanding balance declines at a faster rate in the later years of the loan's life.
• B) The remaining balance after three years will be $125,000 less one third of the interest paid during the first three years.
• C) Because the outstanding balance declines over time, the monthly payments will also decline over time.
• D) Interest payments on the mortgage will increase steadily over time, but the total amount of each payment will remain constant.
• E) The proportion of the monthly payment that goes towards repayment of principal will be lower 10 years from now than it will be the first year.

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Definitions:

Single Measurements

The act of measuring an entity or phenomenon once, as opposed to taking multiple measurements over time.

Treatment

An intervention or procedure designed to address a medical condition or improve health outcomes.

Randomization

The process of randomly assigning study participants to different groups, such as treatment or control groups, to ensure objectivity and validity.

Group Assignment

A task or project assigned to a set of individuals expected to work collaboratively towards a common goal or outcome.