Which of the following is correct regarding a 20-year monthly payment amortized mortgage with a nominal interest rate of 10%? O A. the payments per month will increase over time B. a larger proportion of the first monthly payment will be allotted to the payment of the interest and a similar proportion to the principal, as compared to the last monthly payment O c. the total peso amount of interest being paid off each month increases as the loan approaches the maturity date. O D. the first monthly payment will give an exact interest of 10%
Which of the following is correct regarding a 20-year monthly payment amortized mortgage with a nominal interest rate of 10%? O A. the payments per month will increase over time B. a larger proportion of the first monthly payment will be allotted to the payment of the interest and a similar proportion to the principal, as compared to the last monthly payment O c. the total peso amount of interest being paid off each month increases as the loan approaches the maturity date. O D. the first monthly payment will give an exact interest of 10%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:Which of the following is correct regarding a 20-year monthly payment amortized mortgage
with a nominal interest rate of 10%?
O A. the payments per month will increase over time
B. a larger proportion of the first monthly payment will be allotted to the payment of
the interest and a similar proportion to the principal, as compared to the last
monthly payment
O c. the total peso amount of interest being paid off each month increases as the
loan approaches the maturity date.
D.
the first monthly payment will give an exact interest of 10%
Transcribed Image Text:Which of the following refers to the ratio of the interest to the principal repayment on an
annual unpaid loan?
A. it increases as the loan gets older
О в.
it decreases as the loan gets older
O c. it remains constant over the life of the loan
O D. it changes according to the level of market interest rates during the life of the
loan
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education