A Borrower Took Out a 30-Year Fixed-Rate Mortgage of $2,250,000

question 7

Multiple Choice

A borrower took out a 30-year fixed-rate mortgage of $2,250,000 at a 7.2 percent annual rate. After five years,he wishes to pay off the remaining balance. Interest rates have by then fallen to 7 percent. How much must he pay to retire the mortgage (to the nearest dollar) ?

• A)$2,122,426
• B)$2,225,330
• C)$2,015,678
• D)$2,212,041
• E)$1,999,998

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