A $250,000 Loan Is to Be Amortized Over 8 Years

question 97

Multiple Choice

A $250,000 loan is to be amortized over 8 years, with annual end-of-year payments.Which of these statements is CORRECT?

• A) The proportion of interest versus principal repayment would be the same for each of the 8 payments.
• B) The annual payments would be larger if the interest rate were lower.
• C) If the loan were amortized over 10 years rather than 8 years, and if the interest rate were the same in either case, the first payment would include more dollars of interest under the 8-year amortization plan.
• D) The proportion of each payment that represents interest as opposed to repayment of principal would be lower if the interest rate were lower.
• E) The last payment would have a higher proportion of interest than the first payment.

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Definitions:

Teratogens

Agents, such as chemicals or viruses, that can cause developmental malformations or defects in an embryo or fetus.

Sensitive Periods

Specific times during early development when the brain is particularly receptive to learning certain skills or knowledge.

Genetic Susceptibility

The increased likelihood of developing a particular disease based on a person's genetic makeup.

Motor Development

Refers to the progression of muscle coordination, strength, and the ability to move and control physical actions.