Mathematics, 05.08.2020 19:01, rebecabosca
The monthly mortgage payment in dollars, P, for a house is a function of three variables: P=f(A, r,N). Where A is the amount borrowed in dollars, r is the interest rate, and N is the number of years before the mortgage is paid off.
A) f(92000,14,30)=1090.08. What does this tell you, in financial terms?
B) ∂P/∂r (92000,14,30) =72.82. What is the financial significance of the number 72.82?
C) Would you expect ∂P/∂A to be positive or negative? Why?
D) Would you expect ∂P/∂N to be positive or negative? Why?
Answers: 1
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