Consider a Function of Three Variables $P = f ( A , r , N )$

question 70

Essay

Consider a function of three variables $P = f ( A , r , N )$ , where $P$ is the monthly mortgage payment in dollars, $A$ is the amount borrowed in dollars, $r$ is the annual interest rate, and $N$ is the number of years before the mortgage is paid off.(a) Suppose $f ( 180,000,6,30 ) = 1080$ . What does this tell you in financial terms?
(b) Suppose $\frac { \delta f } { \delta r } ( 180,000,6,30 ) = 115.73$ . What does this tell you in financial terms?
(c) Suppose $\frac { \delta f } { \delta N } ( 180,000,6,30 ) = - 12.86$ . What does this tell you in financial terms?

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Definitions:

Deindividuation

The loss of self-awareness and self-restraint occurring in group situations that foster arousal and anonymity.

Cognitive Dissonance

The mental discomfort experienced by an individual who holds two or more contradictory beliefs, ideas, or values at the same time, leading to tension and the motivation to reduce the dissonance.

Role-Playing

An educational or therapeutic technique where individuals act out roles in particular scenarios to learn, practice behaviors, or gain insight into themselves.

Attitude Theory

A study within social psychology that examines the structure, formation, and function of attitudes, which are psychological tendencies expressed by evaluating a particular entity with some degree of favor or disfavor.