Which of the following statements regarding a 30-year (360-month) $100,000 fixed-rate mortgage is CORRECT? (Ignore all taxes and transactions costs. Group of answer choices Because it is a fixed rate mortgage, the amount paid in interest per payment is constant. The remaining balance after three years will be $100,000 less the total amount of interest paid during the first 36 months. With an amortized loan, a bigger proportion of each month's payment goes toward interest in the early periods. The monthly payment on the mortgage will steadily decline over time.
Which of the following statements regarding a 30-year (360-month) $100,000 fixed-rate mortgage is CORRECT? (Ignore all taxes and transactions costs. Group of answer choices Because it is a fixed rate mortgage, the amount paid in interest per payment is constant. The remaining balance after three years will be $100,000 less the total amount of interest paid during the first 36 months. With an amortized loan, a bigger proportion of each month's payment goes toward interest in the early periods. The monthly payment on the mortgage will steadily decline over time.
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
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Transcribed Image Text:Which of the following statements regarding a
30-year (360-month) $100,000 fixed-rate
mortgage is CORRECT? (Ignore all taxes and
transactions costs.
Group of answer choices
Because it is a fixed rate mortgage,
the amount paid in interest per
payment is constant.
The remaining balance after three
years will be $100,000 less the total
amount of interest paid during the
first 36 months.
With an amortized loan, a bigger
proportion of each month's
payment goes toward interest in
the early periods.
The monthly payment on the
mortgage will steadily decline over
time.
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