QUESTION IMAGE
Question
what does the interest rate in a mortgage determine?
the cost of the
house
the amount of
monthly rent
the amount of
money borrowed
from the bank
the cost over time
in addition to the
principal amount
borrowed
Brief Explanations
To determine the correct option, we analyze each choice:
- "the cost of the house" is determined by its market value, not the mortgage interest rate.
- "the amount of monthly rent" is irrelevant as a mortgage is for buying, not renting.
- "the amount of money borrowed from the bank" is the principal, set at loan approval, not by the interest rate.
- "the cost over time in addition to the principal amount borrowed" is correct because mortgage interest is the extra cost paid over time on top of repaying the principal.
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the cost over time in addition to the principal amount borrowed