Which of the following statements are true? Check all that apply. In the early years of a 30-year loan, most of the monthly payment goes toward interest. With the same term and principal, a loan at 5\% APR will have a lower monthly payment than a loan at 6\% APR. With the same APR and principal, a 15-year loan will have a lower monthly payment than a 30-year loan. Question Help: \( \square \) Message instructor

1. **Interest Dominance in Early Years for a 30-Year Loan** For a fixed-rate mortgage, the amortization schedule is such that the interest portion is calculated on the remaining principal balance. In the early years, the principal balance is high, so the interest component is higher, and most of your payment goes toward interest. Hence, this statement is true. 2. **Effect of APR on Monthly Payment with Same Term and Principal** With a fixed principal and term, the monthly payment depends on the interest rate. A lower APR, such as \(5\%\) compared to \(6\%\), results in lower interest charges each month, leading to a lower monthly payment. Thus, this statement is true. 3. **Comparison of Monthly Payments for a 15-Year vs. a 30-Year Loan with the Same APR and Principal** Even though both loans have the same APR and principal, the 15-year loan has a shorter period over which to repay the debt. This requires larger monthly payments to pay off the loan in a shorter period, compared to a 30-year loan which spreads the repayment over a longer period with smaller payments. Therefore, this statement is false.