The monthly payment for a homae loan is given by a function f(P,r,N), where P is the...

Question:

The monthly payment for a home loan is given by a function f(P,r,N), where P is the principal, r the interest rate expressed as a decimal, and N the length of the loan in months. If P = $100,000, r = 0.06, and N = 240, then the monthly payment is f(100,000, 0,06, 240) = 716.43. Furthermore, with these values, we have sf/sP= 0.0072,sf/sr = 5,769, sf/sN= -1.5467. Estimate the following values.

(a) The change in monthly payment per $1,000 increase in loan principal.

(b) The change in monthly payment if the interest rate increases to r = 6.5%.

(c) The change in monthly payment if the length of the loan increases to 24 years.

Economic Analysis

Economic analysis is the determination of macro and micro economic. Macro being a study of a country economy as a whole, micro relates to individual economy. Under macro comes, investment, saving, borrowing, purchase power and many more.

Answer and Explanation:

Given,

{eq}\begin{array}{l} {\rm{Principal\; P}} = \$ 100000\\ {\rm{Interest\; rate }}r = 0.06\\ {\rm{Year\; N}} = 20\\ {\rm{Monthly \;payment\;...

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