1. Which of the following describes a fully amortizing loan?
Pay rate= accrual rate
Cannot be determined from information given
Pay rate> accrual rate
Pay rate< accrual rate
2. A borrower takes a fixed-rate mortgage for $400,000. The interest rate on this mortgage is 5%, the loan term is 30 years, and the borrower must make a monthly payment of $1,667 on this loan. Which of the following describes what kind of mortgage this borrower has?
a. Negatively amortizing
b. Partially amortizing
c. Fully amortizing
d. Interest only