A friend of yours has just purchased a house and has incurred a $50,000, 11%

mortgage, payable at $476.17 per month. After making the first monthly pay¬

ment, he received a receipt from the bank stating that only $17.84 of the $476.17 had been applied to reducing the principal amount of the loan. Your friend com¬

putes that at the rate of $17.84 per month, it will take over 233 years to pay off the $50,000 mortgage. Do you agree with your friend’s analysis? LO3