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.

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