If You Double the Principal Repayment Called for on Your

question 80

Multiple Choice

If you double the principal repayment called for on your car loan each month without doubling the interest payment, you will

• A) reduce the term of the loan by half.
• B) reduce the amount of interest you pay by about 30%.
• C) not have much effect since you are not also doubling the interest paid monthly.
• D) Both A and B are correct.

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Definitions:

Target

In a business context, a target can refer to a specific goal or benchmark aimed to be achieved, such as sales targets or performance targets.

Individual Identity

The distinctive characteristics or personality that makes a person unique from others.

Typical Consolidation

The process of combining multiple financial statements from different entities into one aggregate financial statement.

Net Present Value

A calculation that compares the value of all cash inflows and outflows of a project or investment using a discount rate, to determine its profitability.