You plan to take out a 30-year fixed rate mortgage for $275,000. Let P(r) be you

Question

You plan to take out a 30-year fixed rate mortgage for $275,000. Let P(r) be you monthly payment if the interest rate is r% per year, compounded monthly. Interpret the equations. P(7) = 1829.58 and P'(7) = 184.69. Interpret P(7) = 1829.58. Select the correct answer below. If the interest rate on the mortgage is 7%, the monthly payment will be $1829.58 If the interest rate on the mortgage is 8%, the monthly payment will be $184.69. If the interest rate on the mortgage is 7%, the monthly payment will be $184 69. If the interest rate on the mortgage is 8%, the monthly payment will be $1829.58. Interpret P'(7) = 184 69. Select the correct answer below. If the interest rate increases from 7% to 8%, the monthly payment will decrease by approximately $184.69. If the interest rate decreases from 8%, to 7%, the monthly payment will be approximately $1829.58. If the interest rate decreases from 8% to 7%, the monthly payment will increase by approximately $1829.58. If the interest rate increases from 7% to 8%, the monthly payment will increase by approximately $184.69.

Explanation / Answer

It is given that if interest rate is r % then P(r) is monthly payment.

Hence interest rate is 7% and monthly payment is 1829.58 dollars.

(b) we observe p'(7) is positive that means if interest rate increase from 7% , the monthly payment will increase by 184.69 dollars.

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