The Monthly Mortgage Payment in Dollars, P, for a House

question 47

Multiple Choice

The monthly mortgage payment in dollars, P, for a house is a function of three variables P = f(A, r, N) , where A is the amount borrowed in dollars, r is the interest rate, and N is the number of years before the mortgage is paid off. It is given that:

Estimate the value of and interpret your answer in terms of a mortgage payment. Select all answers that apply.

• A)We are currently borrowing $100,000 at 7% interest rate on a 20-year mortgage.
• B)The monthly payment will go up by approximately $0.007753 for each extra percentage point charged.
• C)The monthly payment will go up by approximately $0.007753 for each extra dollar we borrow.
• D)The monthly payment will go up by approximately $0.007753 for each extra year of the mortgage.
• E)The monthly payment will go down by approximately $0.007753 for each extra dollar we borrow.

---

Definitions:

Sensory Receptors

Specialized cells or structures in the body that respond to external stimuli, such as light, sound, touch, or chemicals, and send signals to the brain.

Sensation

The method through which our sense organs and nervous system detect and depict energy forms of stimuli from the surroundings.

Perception

The process by which individuals organize and interpret their sensory impressions to give meaning to their environment.

Transduction

A process by which sensory receptors change physical stimuli into signals that are eventually sent to the brain.