Question: HOME MORTGAGES The monthly payment that amortizes a loan of A dollars in t yr when the interest rate is r per year, compounded monthly, is given by
P = f(A, r, t) = Ar/12[1 - (1 + (r/12)-12t)]
a. What is the monthly payment for a home mortgage of $300,000 that will be amortized over 30 yr with an interest rate of 6%/year? An interest rate of 8%/year?
b. Find the monthly payment for a home mortgage of $300,000 that will be amortized over 20 yr with an interest rate of 8%/year.