It seems like there are some typos or formatting issues in the provided chart, and the information regarding the mortgage terms, rates, and payments is not completely clear. However, I'll provide a general detailed step-by-step solution for how to approach such questions based on typical fixed-rate mortgage payments.
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Question: Given a fixed-rate mortgage chart, what will the majority of Demarco and Tanya's payment go towards by year 10 and year 20?
### Step-by-Step Solution:
1. Understanding Mortgage Payments:
- Fixed-rate mortgage payments consist of two primary components: principal and interest.
- In the early years of a mortgage, a larger portion of the payment typically goes toward paying interest.
- Over time, as the principal decreases, a larger portion of the payment goes toward paying down the principal.
2. Analyzing Mortgage Payments Over Time:
- At the beginning of a mortgage, interest payments are high because they are calculated as a percentage of the loan's principal balance, which is still large.
- As payments are made over time, the principal balance decreases.
- Consequently, the amount of interest paid each period decreases, while the amount of principal repaid increases.
3. Year 10 Payment Breakdown:
- By the 10th year, significant payments toward the mortgage will still be in the early stages, though some progress will have been made in paying off the principal.
- However, a substantial portion of each payment will still go towards interest, given that the principal balance is still considerable at this point.
4. Year 20 Payment Breakdown:
- By the 20th year, the principal balance will have been reduced more significantly.
- Therefore, a larger portion of each payment will go towards reducing the principal rather than paying interest.
### Summary:
- By Year 10: The majority of the payment will go toward interest.
- By Year 20: The majority of the payment will go toward principal.
### Conclusion:
Demarco and Tanya's mortgage payments will undergo a shift in focus over time. Initially, more of their payment will go towards paying interest, but as they progress through their mortgage term, more of their payment will be directed towards paying off the principal of the loan. This trend is common in fixed-rate mortgages due to the nature of how interest and principal payments are structured.
