You plan to take out a 30-year fixed rate mortgage for $100,000. Let P(r) be your monthly payment if the interest rate is f% per year, compounded monthly. Interpret the equations (a) P(3) = 421.60 and (b) P'(3) = 53.93.
(a) Interpret P(3) = 421.60. Select the correct answer below:
a. If the interest rate on the mortgage is 4%, the monthly payment will be $53.93
b. If the interest rate on the mortgage is 3%, the monthly payment will be $53.93
c. If the interest rate on the mortgage is 3% the monthly payment will be $421.60
d. If the interest rate on the mortgage is 4%, the monthly payment will be $421.60
(b) Interpret P'(3) = 53.93 Select the correct answer below.
a. If the interest rate decreases from 4% to 3% , the monthly payment will be approximately $421.60
b. If the interest rate decreases from 4% to 3%, the monthly payment will increase by approximately $421.60
c. If the interest rate increases from 3% to 4%, the monthly payment will increase by approximately $53.93
d. If the interest rate increases from 4% to 4%, the monthly payment will decrease by approximately $53.93.