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Which of the following statements regarding a 2 0 - year ( 2 4 0 - month ) $ 2 2 5 , 0 0
Which of the following statements regarding a year month $ fixedrate mortgage is CORRECT?
Ignore taxes and transactions costs.
Oa Because it is a fixedrate mortgage, the monthly loan payments which include both interest and
principal payments are constant.
Ob Interest payments on the mortgage will increase steadily over time, but the total amount of each payment
will remain constant.
Oc The outstanding balance declines at a slower rate in the later years of the loan's life.
Od 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.
Oe The remaining balance after three years will be $ less one third of the interest paid during the
first three years.
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