Question

This Question: 13 pts 14 of 25 You plan to take oa ate mortgage for $300,000. Let P(o) be your monthly payment i the interest ra is 1% per year, compounded monthly. Interpret the equators (a) P(4) 1432.25 and (b) P(4) 172.9. (a) Interpret (4)-1432.25. Select the correct answer below O A. If the inter est rate on the mortgage is 5%, the monthly payment will be $172.95 в, и the nterest rate on the mortgage is 5%, the monthly payment will be S143225. ° C. If the interest rate on the mortgage is 4%, the monthly payment wil be $1432.25. 0 D. If the interest rate on the mortgage is 4%, the monthly payment wil be $172 95. (b) Interpret P'(4)-172.95. Select the correct answer below A, if the interest rate decreases from 5% to 4%, the monthly payment will be approumately $1432.25. в. the interest rate increases from 4% to 5%, the monthly payment will ncrease by appronmately S 172.95. c. if the nterest rate decreases from 5% to 4%, the monthly payment wil increase by approximately $143225. D. If the interest rate increases from 4% to 5%, the monthly payment will decrease by approximately S 172.95. Click to select your answer

Answer 1

a) P(4) represents the amount of monthly payments if rate of interest is 4%

Option C is correct.

b) Option B is correct.