In relation to a housing loan of $250 000 for 20 years at 9% per annum compounding monthly with monthly repayments:

Question

Quizplus · Accepted Answer

A) This is correct, the monthly repayment can be calculated using a loan repayment calculator.
B) This is correct, the first repayment will include more interest and less principal repayment due to the compounding of interest.
C) This is incorrect, the amount of interest payable each month will remain constant as the interest is calculated based on the outstanding loan balance.
D) This is correct, as the borrower continues to make repayments, the outstanding loan balance will decrease and therefore the amount of interest paid each month will also decrease, resulting in a faster reduction of the outstanding loan balance.

In Relation to a Housing Loan of $250 000 for 20