Which of the Following Mortgages Will Have the Greatest Principal

question 48

Multiple Choice

Which of the following mortgages will have the greatest principal amount outstanding after the 120^th payment?

• A) 15-year, 8 percent
• B) 15-year, 10 percent
• C) 25-year, 8 percent
• D) 25-year, 10 percent
• E) C and D would be the same.

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Definitions:

Sampled Population

The subset of individuals or items selected from the entire population for the purpose of statistical analysis.

Population Mean

The average value of all the members of a population.

P-Value

The probability of observing results at least as extreme as those in a data set, given that the null hypothesis is true.

Hypothesis Testing

A statistical method used to decide whether a hypothesis about a parameter in a population is supported by the data gathered from a sample.