You just borrowed $1,000,000 using a 30 year home loan that's interest-only for the first 4 years, and principal and interest (P&I) for the remaining 26 years. The interest rate is 5.76% pa compounding monthly which is not expected to change. Which of the following statements is NOT correct? Select one: a. The effective monthly rate is 0.048 per month, given as a decimal. If the interest rate falls, the IO and P&I monthly payments will fall. b. If the IO term was one year shorter so the P&I term was one year longer, then the monthly payments over the P&I term would be lower. c. The IO loan's perpetuity factor' is 208.333333, while the P&I loan's annuity factor is 161.568937. d. The IO loan payments will be $4,800 per month, rounded to the nearest cent. e. The P&I loan payments will be $6,189.31 per month, rounded to the nearest cent.
You just borrowed $1,000,000 using a 30 year home loan that's interest-only for the first 4 years, and principal and interest (P&I) for the remaining 26 years. The interest rate is 5.76% pa compounding monthly which is not expected to change. Which of the following statements is NOT correct? Select one:
a. The effective monthly rate is 0.048 per month, given as a decimal. If the interest rate falls, the IO and P&I monthly payments will fall.
b. If the IO term was one year shorter so the P&I term was one year longer, then the monthly payments over the P&I term would be lower.
c. The IO loan's perpetuity factor' is 208.333333, while the P&I loan's
d. The IO loan payments will be $4,800 per month, rounded to the nearest cent.
e. The P&I loan payments will be $6,189.31 per month, rounded to the nearest cent.
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