# Mba 501 – You Plan To Take Out A 30-Year Fixed Rate Mortgage For \$125,000.

You plan to take out a 30-year fixed rate mortgage for \$125,000. Let P(r) be your monthly payment if the interest rate is r% per year, compounded monthly. Interpret the equations(a) P(7) = 831. 63 and (b) P'(7 ) = 83. 95. (a) Interpret P(7)equals831. 63. Select the correct answer belowA. If the interest rate on the mortgage is 8%, the monthly payment will be \$831. 63. B. If the interest rate on the mortgage is 7%, the monthly payment will be \$83. 95. C. If the interest rate on the mortgage is 8%, the monthly payment will be \$83. 95. D. If the interest rate on the mortgage is 7%, the monthly payment will be \$831. 63. (b) InterpretP'(7) = 83. 95. Select the correct answer below. A. If the interest rate increases from 7% to 8%, the monthly payment will decrease by approximately \$83. 95B. If the interest rate decreases from 8% to 7%, the monthly payment will be approximately \$831. 63C. If the interest rate increases from 7% to 8%, the monthly payment will increase by approximately \$83. 95D. If the interest rate decreases from 8% to 7%, the monthly payment will increase by approximately \$831. 63.