Business, 01.04.2020 21:47, tylerchitwood211

Consider a homebuyer/investor who plans to buy a new house, the price of which is $ 500,000. Suppose the buyer does not have any initial savings for the down payment. To buy the house, he needs to borrow $ 500,000 from a bank in the form of a mortgage loan. The mortgage is a 30-year- xed-rate mortgage. After buying the house, the buyer budget is $ 30,011 per year. That is, if the mortgage asks him to repay more than $ 30,011 per year (this happens when the interest rate is too high), then he cannot a ord it and would choose not to buy this house. Derive the investment of this buyer as a function of interest rate r.

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Consider a homebuyer/investor who plans to buy a new house, the price of which is $ 500,000. Suppose...