Suppose You Take Out a Fixed Rate Mortgage and Make

question 36

Multiple Choice

Suppose you take out a fixed rate mortgage and make an extra payment of $50 per month in addition to the scheduled monthly payments. Which of the following mortgages will have the greatest difference in the number of actual payments and the number of scheduled payments?

• A) 15-year, 7 percent
• B) 15-year, 9 percent
• C) 30-year; 7 percent
• D) 30-year, 9 percent
• E) All will be reduced by the same number of payments.

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Definitions:

Brainstorming

A creative group activity aimed at generating a large number of ideas for the solution to a problem.

Creativity

The ability to produce original and unusual ideas, or to make something new or imaginative.

Quality Circles

Small groups of workers from the same work area who meet regularly to identify, analyze, and solve work-related problems, aiming to improve quality, efficiency, and the work environment.

Team Contribution

The individual inputs or efforts provided by each member of a team, which collectively contribute to the team's overall objectives.