Question You plan to take out a 30-year fixed rate mortgage for $100,000. Let P(r) be your monthly payment if the interest rate is r% per year, compounded monthly. Interpret the equation and select the correct answer below: P′(5)=61.12 a. If the interest rate decreases from 6% to 5%, the monthly payment will increase by approximately $536.82. b. If the interest rate increases from 5% to 6%, the monthly payment will increase by approximately $61.12. c. If the interest rate increases from 5% to 6%, the monthly payment will decrease by approximately $61.12.
Question
You plan to take out a 30-year fixed rate mortgage for $100,000. Let P(r) be your monthly payment if the
interest rate is r% per year, compounded monthly.
Interpret the equation and select the correct answer below:
P′(5)=61.12
a. If the interest rate decreases from 6% to 5%, the monthly payment will increase by approximately $536.82.
b. If the interest rate increases from 5% to 6%, the monthly payment will increase by approximately $61.12.
c. If the interest rate increases from 5% to 6%, the monthly payment will decrease by approximately $61.12.
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