Temple Corporation purchased a piece of real estate, paying $4,000,000 cash and financing $7,000,000 of the purchase price with a 10-year, 15% installment note. The note calls for equal monthly payments that will result in the debt being completely repaid by the end of the tenth year. In this situation: A: The aggregate amount of the monthly payments is $7,000,000. B: Each monthly payment is greater than the amount of interest accruing each month. C: The portion of each payment representing interest expense will increase over the 10year period, since principal is being paid off, yet the payment amount does not decrease. D: The portion of each monthly payment representing repayment of principal remains the same throughout the 10-year period.
Temple Corporation purchased a piece of real estate, paying $4,000,000 cash and financing $7,000,000 of the purchase price with a 10-year, 15% installment note. The note calls for equal monthly payments that will result in the debt being completely repaid by the end of the tenth year. In this situation:
A: The aggregate amount of the monthly payments is $7,000,000.
B: Each monthly payment is greater than the amount of interest accruing each month.
C: The portion of each payment representing interest expense will increase over the 10year period, since principal is being paid off, yet the payment amount does not decrease.
D: The portion of each monthly payment representing repayment of principal remains the same throughout the 10-year period.
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