You plan to take out a? 30-year fixed rate mortgage for ?$200,000. Let? P(r) be your monthly payment if the interest rate is? r% per? year, compounded monthly. Interpret the equations ?(a) ?P(2?)=739.24 and? (b) P′(2)=100.01.
(a) Interpret ?P(2)=739.24. Select the correct answer below.
A. If the interest rate on the mortgage is 2?%, the monthly payment will be ?$739.24.
B. If the interest rate on the mortgage is 3?%, the monthly payment will be ?$739.24.
C. If the interest rate on the mortgage is 3?%, the monthly payment will be ?$100.01.
D. If the interest rate on the mortgage is 2%, the monthly payment will be ?$100.01.
(b) Interpret P′(2)=100.01. Select the correct answer below.
A. If the interest rate increases from 2?% to 3%, the monthly payment will increase by approximately ?$100.01.
B. If the interest rate decreases from 3% to 2%, the monthly payment will be approximately ?$739.24.
C. If the interest rate increases from 2% to 3?%, the monthly payment will decrease by approximately ?$100.01.
D. f the interest rate decreases from 3?% to 2?%, the monthly payment will increase by approximately ?$739.24.