What differences between fixed and variable rate mortgage

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Question - The total amount of interest expense over the bond's life is the same under both methods (straight line and effective interest). "However, when the annual amounts are materially different, generally accepted accounting principles require use of the effective-interest method" (Kieso et al, p.771). To give a better picture about rates, my question is what are the differences between a fixed rate mortgage and a variable rate mortgage? How could they impact the debt?

Reference no: EM131596862

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