You are shopping for a $150,000, 30-year (360-month) loan to buy a house. The monthly payment is

Question:

You are shopping for a $150,000, 30-year (360-month) loan to buy a house. The monthly payment is 150,000(r/12) m(r) 1 - (1 + r/12)-360°

where r is the annual interest rate. Suppose banks are currently offering interest rates between 6% and 8%.

a. Use the Intermediate Value Theorem to show there is a value of r in (0.06, 0.08)—an interest rate between 6% and 8%—that allows you to make monthly payments of $1000 per month.

b. Use a graph to illustrate your explanation to part (a). Then determine the interest rate you need for monthly payments of $1000.

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Related Book For book-img-for-question

Calculus Early Transcendentals

ISBN: 978-0321947345

2nd edition

Authors: William L. Briggs, Lyle Cochran, Bernard Gillett

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Question Posted: Feb 08, 2019 09:15 AM

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You are shopping for a $150,000, 30-year (360-month) loan to buy a house. The monthly payment is

Question:

150,000(r/12) m(r) 1 - (1 + r/12)-360°

Step by Step Answer:

a Because m is a continuous function of r on 06 08 and because m06 89933 ...View the full answer

Calculus Early Transcendentals

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