Analyzing Interest Rates on a Mortgage Colleen and Bill have just purchased a house for $ 650 , 000 , with the seller holding a second mortgage of $ 100 , 000 . They promise to pay the seller $ 100 , 000 plus all accrued interest 5 years from now. The seller offers them three interest options on the second mortgage: (a) Simple interest at 6 % per annum (b) 5.5 % interest compounded monthly (c) 5.25 % interest compounded continuously Which option is best? That is, which results in paying the least interest on the loan?
Analyzing Interest Rates on a Mortgage Colleen and Bill have just purchased a house for $ 650 , 000 , with the seller holding a second mortgage of $ 100 , 000 . They promise to pay the seller $ 100 , 000 plus all accrued interest 5 years from now. The seller offers them three interest options on the second mortgage: (a) Simple interest at 6 % per annum (b) 5.5 % interest compounded monthly (c) 5.25 % interest compounded continuously Which option is best? That is, which results in paying the least interest on the loan?
Solution Summary: The author explains that Colleen and Bill have purchased a house for 650, 000, with the seller holding the second mortgage of 100,000. The seller offers them three interest options: simple interest at 6 %
Analyzing Interest Rates on a Mortgage
Colleen and Bill have just purchased a house for
, with the seller holding a second mortgage of
. They promise to pay the seller
plus all accrued interest 5 years from now. The seller offers them three interest options on the second mortgage:
(a) Simple interest at
per annum
(b)
interest compounded monthly
(c)
interest compounded continuously Which option is best? That is, which results in paying the least interest on the loan?
Write an equation for the graph shown below.
5
4
3
2
1
-5-4-3-2-1
-1
1 2 3 4 5
f(x) =
-2
-3
-4
-5
1. We want to graph the function
f(x) log4 x. In a table below,
=
find at three points with nice
integer y-values (no rounding!) and
then graph the function at right. Be
sure to clearly indicate any
asymptotes. (4 points)
3
2
1-
-1
0
1
2
3
4 5
10
X
log4(x)
-1
-2
-3-
6 7
8
00
Chapter 5 Solutions
Precalculus Enhanced with Graphing Utilities Plus MyLab Math with Pearson eText - Access Card Package (7th Edition) (Sullivan & Sullivan Precalculus Titles)
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