Which of the following statements regarding a 20-year monthly payment amortized mortgage with a nominal interest rate of 10% is correct? a. exactly 10% of the first monthly payment represents interest. b. the monthly payments will increase over time. c. a larger proportion of the first monthly payment will be interest, and a smaller proportion will be principal, than for the last monthly payment. d. the total dollar amount of interest being paid off each month gets larger as the loan approaches maturity. e. the amount representing interest in the first payment would be higher if the nominal interest rate were 7% rather than 10%.

You are the owner of a local honda dealership. unlike other dealerships in the area, you take pride in your “no haggle” sales policy. last year, your dealership earned record profits of $1.5 million. however, according to the local chamber of commerce, your earnings were 10 percent less than either of your competitors. in your market, the price elasticity of demand for midsized honda automobiles is 4.5. in each of the last five years, your dealership has sold more midsized automobiles than any other honda dealership in the nation. this entitled your dealership to an additional 30 percent off the manufacturer’s suggested retail price (msrp) in each year. taking this into account, your marginal cost of a midsized automobile is $11,000. what price should you charge for a midsized automobile if you expect to maintain your record sales?