Financial accounting 16th Edition by Jan Williams,Susan Haka,Mark Bettner ,Joseph Carcello

Exercise 14

A friend of yours has just purchased a house and has takenout a $50,000, 11 percent mortgage, payable at $476.17per month.fter making the first monthly payment, he received a receipt from the bank stating that only $17.84 ofthe $476.17 had been applied to reducing theprincipalamount ofthe loan.our friend computes that, at the rate of$17.84 per month, it will take over 233 years to payoff the$50,000 mortgage.o you agree with your friend's analysisExplain.