1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Alex Ar [27]
2 years ago
11

Describe the effect an increase in i, the interest rate applied to the present value, has on the monthly payment P in the formul

a a. An increase in i, the interest rate, will not change P, the monthly payment. b. An increase in i, the interest rate, will create an increase in P, the monthly payment. c. An increase in i, the interest rate, will create a decrease in P, the monthly payment. d. An increase in i, the interest rate, can increase or decrease P, the monthly payment, depending on the value of PV.
Mathematics
2 answers:
VARVARA [1.3K]2 years ago
4 0

Answer:

B. An increase in i, the interest rate, will create an increase in P, the monthly payment.

Step-by-step explanation:

We have the formula for the monthly payment as,

P=\frac{i \times PV}{1-(1+i)^{-n} },

where P = monthly payment, i = rate of interest, PV = present value and n = time period.

Now, as i increase we get that (1+i) increases and so (1+i)^{n} increases.

This gives us that, \frac{1}{(1+i)^{n} } decreases and so 1-\frac{1}{(1+i)^{n}} decreases

Therefore, \frac{1}{1-(1+i)^{-n} } increases.

So, we get that as i increases , the value of P will increase.

Hence, option B is correct.

jok3333 [9.3K]2 years ago
4 0

Answer:

Option B is the correct answer -  An increase in i, the interest rate, will create an increase in P, the monthly payment.

Step-by-step explanation:

The monthly payment formula is

p=\frac{r(PV)}{1-(1+r)^{-n} }

where p = monthly payment, r = rate of interest, n = time period and PV = present value.

Here 'r' is proportional to p. When r increases, p increases and vice versa.

Hence, option B is correct.

Summing up in simple language, we always see, when the rate of interest is higher, the installments are higher and when rate is lower the monthly installments are less.

You might be interested in
Ava has $400 on her credit card. She bought a laptop for $315, and decided to spend the rest on shirts. The unit price of shirts
Montano1993 [528]

Answer:

A is 805i tink and B is for sure 17

Step-by-step explanation:

5 0
2 years ago
Convert 13 over 7 into a mixed number
zalisa [80]

Answer:

13/7

7 goes into 13 1 time

13 minus 7 equals 6

Answer 1 6/7

Step-by-step explanation:


5 0
3 years ago
Read 2 more answers
Abcd is a parallelogram. Photo provided
Savatey [412]
The correct answer is A. 120 ft squared because you must multiply the height times the width which comes to 120.
8 0
3 years ago
An unknown compound has the following chemical formula:
Andru [333]
We are given with 7.5 moles of oxygen and 7.43 moles of nitrogen.To identify the chemical formula of the compound, we divide each numner by the smaller amount between the two. Hence, oxygen is approx. equal to 1 and nitrogen is equal to 1. Hence teh formula is NO or nitric oxide.
8 0
3 years ago
What are exactly two sums that are equivalent to 7(10a+3b)
lina2011 [118]
7(9a+4b) and 7(8a+5b)
7 0
3 years ago
Other questions:
  • A number minus 8 and then subtracted by 12 is equal to 5 what is the number
    7·1 answer
  • Rachael got a 550 on the analytical portion of the Graduate Record Exam (GRE). If GRE scores are normally distributed and have m
    9·1 answer
  • The exponent on b when b^3 is multiplied by b^3 is
    6·2 answers
  • Select all of the following statements that are true.
    7·1 answer
  • Evaluate -1-(-z) when z=-2
    10·1 answer
  • Find the measurements of the unknown angles in this figure
    7·1 answer
  • Solve this system of equations <br><br> Y=2x<br> X = -y + 6
    9·1 answer
  • (6m^5 g^5)^2 simplify
    10·1 answer
  • Polygon A and Polygon B are similar with a ratio of similarity of 5/4. If the perimeter of Polygon A is 20 units, what is the pe
    6·1 answer
  • Algebra 2 unit 5 lesson 6 homework
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!