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WorksheetsAmortization Schedule Basics
Total questions: 20
Worksheet time: 19mins
What is an amortization schedule?
A calculation that determines the total interest paid on a loan.
A table that shows the breakdown of each periodic payment made towards a loan.
A document that outlines the terms and conditions of a loan.
A form that must be completed to apply for a loan.
What is the money you borrow called?
interest
principal
down payment
The fee a bank charges to loan you money is called ________________.
mortgage
principal
interest
You want to buy a house that is valued at $215,000. You are putting 15% down. What is the down payment? What is the loan amount?
$15; $214985
$3225; $211,775
$32,250; $182,750
What is the monthly payment for this amortization schedule?
$2,200.00
$2,725.39
$525.39
$480,000
Imagine Elijah takes out a mortgage to buy a house, choosing the longest repayment period offered. The downside of this decision is that the longer Elijah has the mortgage, the more _____.
collateral that is required by the bank
risk of defaulting on the mortgage
equity will build after seven years
total amount of interest paid
In August 2024, how much of your payment went to the interest amount?
$2,725.39
$2,195.17
$530.21
$2,200.00
If the annual interest is 24%, what is the monthly interest rate?
24%
.24
2%
2
If you pay extra towards the principal of a loan, your interest will decrease the next payment.
True
False
Look at the amortization schedule. If you got a mortgage for $400,000 - how much did you end paying in total for that house?
$400,000
$373,023
$773,023
$700,023
Which of the following best describes the principal of a loan?
The fee charged by the lender for processing the loan.
The monthly payment amount.
The original amount of money borrowed before interest.
The total amount of interest paid over the life of the loan.
If you refinance your mortgage to a lower interest rate, what is the most likely effect on your monthly payment?
Your monthly payment will decrease.
Your monthly payment will increase.
Your loan term will automatically shorten.
Your monthly payment will stay the same.
What happens to the portion of your payment that goes toward interest as you pay down your mortgage over time?
It decreases each month.
It stays the same each month.
It is paid off in the first year.
It increases each month.
Amortization is made up of what two parts?
Interest and payment
Principal and payment
Interest and principal
none of the above
If you have an amortized loan, your monthly payment will _______________
never be the same
sometimes be the same
always be the same
If you have an amortized loan, your monthly payment will be.....
Always different
Sometimes the same
Always the same
Never the same
What is an amortization schedule?
A calculation that determines the total interest paid on a loan.
A table that shows the breakdown of each periodic payment made towards a loan.
A document that outlines the terms and conditions of a loan.
A form that must be completed to apply for a loan.
What factors affect the amortization of a loan?
credit score, loan purpose, borrower's age, loan origination fee
loan amount, interest rate, loan term, payment frequency
employment status, loan collateral, loan officer's recommendation, loan application fee
borrower's income, loan repayment history, loan processing time, loan closing fee
What is the difference between loan principal and interest?
The loan principal is the interest charged on the borrowed amount, while the interest is the initial amount borrowed.
The loan principal is the total amount borrowed, while the interest is the amount paid back over time.
The loan principal is the additional amount charged for borrowing the money, while the interest is the initial amount borrowed.
The loan principal is the initial amount borrowed, while the interest is the additional amount charged for borrowing the money.
Why is it important to know how much of your monthly payment goes toward interest versus principal in an amortization schedule?
It helps you understand how quickly you are paying off the loan.
It tells you your credit score.
It shows your monthly income.
It helps you calculate your taxes.
