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  3. 1. your friend has just purchased a house and has

1. Your friend has just purchased a house and has incurred a $150,000, 4.5% mortgage...

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Accounting

1. Your friend has just purchased a house and has incurred a $150,000, 4.5% mortgage payable at $760.03 per month. After making the first monthly payment, he receives a statement from the bank indicating only $197.53 had been applied to reducing the principal amount of the loan. Your friend then calculates that at the rate of $197.53 per month, it will take 63 years to pay off the $150,000 mortgage. Discuss and explain whether your friends analysis is correct or not.

2. Discuss and explain why a company may choose to raise capital by issuing bonds instead of issuing stock.

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