Question

Consider a 15-year home mortgage loan with a fixed APR of 4.8%. Which of the following statements is NOT correct? Select one: O a. If you want to entirely pay off the loan at the end of year 10, the required lump sum payment is equal to the present value of 60 monthly payments O b. The monthly interest amount is calculated by 4.8% times the loan balance at the beginning of the month O c. The scheduled monthly loan payment is equal. Od. A smaller proportion of the monthly loan payment goes paying down the loan principal in the early years

Answer 1

Solution :-

The Statement that is not correct is (B)

All others statements are Correct

The Option B is incorrect Because Monthly interest Amount is calculated by ( 4.8 / 12 ) = 0.4% times not 4.8% times of the loan balance at the beginning of the month

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