Given 5 and 30 year loans with the same interest rate, the 30 year loan results in more of each payment being directed toward principal.

Name: Given 5 and 30 year loans with the same interest rate, the 30 year loan results in more of each payment being directed toward principal.
Brand: Quizplus
Rating: 4.9 (42 reviews)

Question

Quizplus · Accepted Answer

In a 30-year loan, compared to a 5-year loan with the same interest rate, a larger portion of each payment is initially directed towards paying interest, not principal, due to the longer amortization period.

Given 5 and 30 Year Loans with the Same Interest