In a fixed-rate mortgage amortization schedule of monthly mortgage payments A. The amount of interest in...
In a fixed-rate mortgage amortization schedule of monthly mortgage payments
| A. |
The amount of interest in each payment is equal to the amount of principal paid |
|
| B. |
Both B and C are true |
|
| C. |
In the early years, principal repayment exceeds interest payments |
|
| D. |
In the early years, interest payments exceed principals repayments |
Homework Answers
D. In the early years, interest payments exceed principals repayments.
Interest amount depends upon the opening balance of loan amount each period in early years the opening balance of loan is a bigger amount which will gradually reduce thus, in early years, interest payments exceed principals repayments for long term loans.
Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.
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