20. How much would the total repayments differ between a fully amortizing 25 year loan for $500,000 at 6.55% and an identical loan repaid over 15 years? a) $139,477.56 b) $184,816.63 c) $289,110.40 d) $231,029.65

20. How much would the total repayments differ between a fully amortizing 25 year loan for $500,000 at 6.55% and an identical loan repaid over 15 years? a) $139,477.56 b) $184,816.63 c) $289,110.40 d) $231,029.65

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 18P

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

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20. How much would the total repayments differ between a fully amortizing 25 year
loan for $500,000 at 6.55% and an identical loan repaid over 15 years?
a) $139,477.56
b) $184,816.63
c) $289,110.40
d) $231,029.65

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