Suppose that you would like to buy a home priced at $200,000. You plan to make a payment of 10% of the purchase price and pay 1.
2% of the purchase price into an
escrow account annually.
a. Compute the total monthly payment and the total interest paid over the life of the loan for a 30-year mortgage at 4.8% annual interest.
b. Compute the total monthly payment and the total interest paid over the life of the loan for a 20-year mortgage at 4.8% annual interest.
escrow account annually.
a. Compute the total monthly payment and the total interest paid over the life of the loan for a 30-year mortgage at 4.8% annual interest.
b. Compute the total monthly payment and the total interest paid over the life of the loan for a 20-year mortgage at 4.8% annual interest.
1 answer:
Answer:
see below
Step-by-step explanation:
When you must do the same tedious calculation several times with different numbers, it is convenient to let a spreadsheet program do it for you. Here, the spreadsheet function PMT( ) computes the payment amount for the given interest rate, number of payments, and loan amount.
The loan amount is 90% of the purchase price.
The total interest over the life of the loan is the sum of the payments less the original loan amount.
The total monthly payment is the sum of the loan payment and the monthly escrow amount, which is 1/12 of the annual escrow amount.
_____
Here, we computed the total of payments using the unrounded "exact" value of each payment. We take this to be a better approximation of the total amount repaid, since the last payment always has an adjustment for any over- or under-payment due to rounding.
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Answer:
Option (2) is correct graph.
Step-by-step explanation:
Given:
The function to graph is given as:
Now, the above function is an exponential function of the form
Where, 'k' and 'a' are constants.
The range of an exponential function is always greater than 0.
The domain is all real numbers.
Now, for graphing it, we need to find some points on it and its end behaviour.
Now, for x = 0, the function value is given as:
So, (0, 4) is a point on the graph.
Now, for x = 1, the function value is given as:
So, (1, 2) is another point on the graph.
Now, for x = 2, the function value is given as:
So, (2, 1) is another point on the graph.
Now, as 'x' tends to ∞, the function value tends to:
So, as
Now, from among all the options, only option (2) fulfills all the conditions given above.
So, option (2) is correct graph.
