A $150,000 loan is to be amortized over 7 years, with annual end-of-year payments. Which of these statements is CORRECT?Single choice

A

The annual payments would be larger if the interest rate were lower.

B

If the loan were amortized over 10 years rather than 7 years, and if the interest rate were the same in either case, the first payment would include more dollars of interest under the 7-year amortization plan.

C

The proportion of each payment that represents interest as opposed to repayment of principal would be higher if the interest rate were lower.

D

The proportion of each payment that represents interest versus repayment of principal would be higher if the interest rate were higher.

E

The proportion of interest versus principal repayment would be the same for each of the 7 payments.

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