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QUESTION 9 Which of the following statements regarding a 30-year monthly payment amortized mortgage with a nominal interest rate of 10% is CORRECT O a.
QUESTION 9 Which of the following statements regarding a 30-year monthly payment amortized mortgage with a nominal interest rate of 10% is CORRECT O a. The monthly payments will increase over time. b. A larger proportion of the first monthly payment will be interest, and a smaller proportion will be principal, than for the last monthly payment. OC. The total dollar amount of interest being paid off each month gets larger as the loan approaches maturity. od. The amount representing interest in the first payment would be higher if the nominal interest rate were 7% rather than 10% Oe. Exactly 10% of the first monthly payment represents interest QUESTION 10 AUS Treasury bond will pay a lump sum of $1,000 exactly 3 years from today. The nominal interest rate is 6%, semiannual compounding. Which of the following statements is CORRECT? O a. The periodic interest rate is greater than 3% b. The periodic rate is less than 3% The present value would be greater if the lamp sum were discounted back for more periodu Od. The present value of the $1,000 would be smaller if interest were compounded monthly rather than semiannually e. The PV of the $1,000 lump sum has a higher present value than the PV of a 3-year, 5333.33 ordinary annuity
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