The monthly payment for a home loan is given by a function f(P,r, N) where P is the principal (the initial size of the loan), r the interest rate, and N the length of the loan in months. Interest rates are expressed as a decimal: A % interest rate is denoted by r = 0.085. If P = 500000, r = 0.085, and N = 276(a 23-year loan), then the monthly payment is f(500000,0.085, 276) 788. Furthermore, with these values we have af OP Estimate: (a) The change in monthly payment per 2000 increase in loan principal: Af dollars = 0.0077, of dr = 8006, (b) The change in monthly payment if the interest rate changes from r = 0.085 to r = 0.075: Af dollars (c) The change in monthly payment if the length of the loan changes from 23 to 25 years: Afa dollars of ON =-1.6048
The monthly payment for a home loan is given by a function f(P,r, N) where P is the principal (the initial size of the loan), r the interest rate, and N the length of the loan in months. Interest rates are expressed as a decimal: A % interest rate is denoted by r = 0.085. If P = 500000, r = 0.085, and N = 276(a 23-year loan), then the monthly payment is f(500000,0.085, 276) 788. Furthermore, with these values we have af OP Estimate: (a) The change in monthly payment per 2000 increase in loan principal: Af dollars = 0.0077, of dr = 8006, (b) The change in monthly payment if the interest rate changes from r = 0.085 to r = 0.075: Af dollars (c) The change in monthly payment if the length of the loan changes from 23 to 25 years: Afa dollars of ON =-1.6048
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Transcribed Image Text:The monthly payment for a home loan is given by a function f(P,r, N) where P is the principal (the initial size of the loan), r the interest rate, and N the length of the loan in months.
Interest rates are expressed as a decimal: A % interest rate is denoted by r = 0.085. If P = 500000, r = 0.085, and N = 276(a 23-year loan), then the monthly payment is
f(500000, 0.085, 276) = 788. Furthermore, with these values we have
af
ӘР
Estimate:
(a) The change in monthly payment per 2000 increase in loan principal:
Afa
dollars
= 0.0077,
of
Ər
= 8006,
(b) The change in monthly payment if the interest rate changes from r = 0.085 to r = 0.075:
Afa
dollars
(c) The change in monthly payment if the length of the loan changes from 23 to 25 years:
dollars
Af
af
ƏN
: -1.6048
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