A Mortgage of $326 000 Is to Be Repaid by Making

question 92

Multiple Choice

A mortgage of $326 000 is to be repaid by making payments of $2500 at the end of each month. If interest is 4.75% compounded semi-annually, what is the term of the mortgage?

• A) 183 months
• B) 106 months
• C) 182 months
• D) 184 months
• E) 105 months

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Definitions:

Variable Cost

Expenses that change in direct proportion to the amount of goods or services produced.

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent, salaries, and loans.

Conversion Cost

The expenses directly related to the transformation of raw materials into finished goods, including labor and manufacturing overhead costs.

Manufacturing Overhead

Indirect costs associated with manufacturing, such as maintenance, utilities, and quality control, not directly traceable to a specific product.