A friend of yours has just purchased a house and has taken, Ask an Expert

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A friend of yours has just purchased a house and has taken out a $50,000, 11 percent mortgage, payable at $476.17 per month.

After making the first monthly payment, he received a receipt from the bank stating that only $17.84 of the $476.17 had been applied to reducing the principal amount of the loan.

Your friend computes that, at the rate of $17.84 per month, it will take over 233 years to pay off the $50,000 mortgage.

Do you agree with your friend's analysis? Explain.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91947283

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