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4 . Which of the following statements regarding a 1 5 - year ( 1 8 0 - month ) $ 1 2 5 ,
Which of the following statements regarding a year month $ fixedrate mortgage is CORRECT? Ignore taxes and transactions costs.
a The remaining balance after three years will be $ less one third of the interest paid during the first three years.
b Because it is a fixedrate mortgage, the monthly loan payments which include both interest and principal payments are constant.
c Interest payments on the mortgage will increase steadily over time, but the total amount of each payment will remain constant.
d The proportion of the monthly payment that goes towards repayment of principal will be lower years from now than it will be the first year.
e The outstanding balance declines at a slower rate in the later years of the loan's life. As time goes on a larger amount of the monthly mortgage payment is used to repay principal and interest. As a result, the outstanding debt decreases at a slower rate throughout the loan's last years of life.
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