Assuming all APRs equal, the effective interest rate on a loanis highest when ________.
the loan has no points and a 30 year maturity and is prepaid infive years
the loan has no points and is prepaid at maturity
points are charged and the loan is paid off at maturity in 30years
points are charged and the loan has a 30 year maturity but prepaidin five years
At the end of five years, calculating the loan balance of aconstant payment mortgage is simply the ________.
present value of a single amount
future value of a single amount
present value of an ordinary annuity
future value of an ordinary annuity
One of the most popular amortizing mortgages today is the constantpayment mortgage. Which of the following characterizes thecomponents of the CPM payment over the life of the loan?
Interest Amortization Payment
Decreasing Decreasing Decreasing
Increasing Decreasing Constant
Decreasing Increasing Constant
Constant Constant Constant
If a loan amount is “taken down” as irregular periodic paymentsuntil payments and accrued interest reach an agreed-upon loanamount, this is an example of a ________.
ARM
CPM
GPM
RAM
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