Multiple Choice
Two loans have the same interest rate and maturity. Loan A has a 15-year amortization rate. Loan B has a 30-year amortization rate. In comparing these two loans from a borrower's perspective:
A) The advantage of Loan A is lower monthly payments and lower balloon payment at maturity.
B) The advantage of Loan B is lower monthly payments and lower balloon payment at maturity.
C) The advantage of Loan A is lower monthly payments but its disadvantage is a higher balloon at maturity.
D) The advantage of Loan B is lower monthly payments but its disadvantage is a higher balloon at maturity.
Correct Answer:
Verified
Correct Answer:
Verified
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