Question

Why does it take 30 years to pay off $150,000 loan, even though you pay $1000 a month?
a. sales tax is really high for home mortgages, and that is why monthly payments are much higher than just paying off principal.
b. banks trick investors into paying more money monthly so they can pocket the rest.
c. most home owners are expected to miss about half of their payments, so banks take this into account when determining the term of the loan.
d. even though the principal would be paid off in just over 10 years, it costs the bank a lot of money fund the loan. the rest of the loan is paid out in interest.

Answer 1

Answer:

Option (d) is correct.

even though the principal would be paid off in just over 10 years, it costs the bank a lot of money fund the loan. the rest of the loan is paid out in interest.

Step-by-step explanation:

Given : It take 30 years to pay off $150,000 loan, even though you pay $1000 a month.

Since, the bank loan the amount at urgent basis need to us and in return charge a high interest rate on loan amount.

We pay the loan amount on monthly basis thus, they charge an interest on monthly basis and thus as we repay a certain value of loan and on the remaining value interest is charged which results out the higher values .

So, this amount of interest charged results in the higher cost of the loan amount and so it took more time to repay the loan then the actual time of the repay of principal amount.

Thus, even though the principal would be paid off in just over 10 years, it costs the bank a lot of money fund the loan. the rest of the loan is paid out in interest.

Option (d) is correct.

Answer 2

Answer:

D

Step-by-step explanation:

D