Case-Based Critical Thinking Questions

Multiple Choice

Case-Based Critical Thinking Questions
Case 3-2
Pamela is getting ready to purchase her first condominium.To get ready for the mortgage process,she gathers her Excel spreadsheets that contain all of her financial information.
-Pamela has been told by one bank that if approved,she will have to pay a compound interest.This means that ____.

A) interest paid is equal to a percentage of principal for each period that the money has been lent
B) interest paid is calculated on the principal and any previous interest payments that have been added to that principal
C) interest paid is equal to a .05 percent of principal for each period that the money has been lent
D) interest paid is calculated on the principal and any late fees that have been added to that principal