Eduardo is considering taking out a 30-year loan with monthly payments of $175 at an APR of 3.3%, compounded monthly, and this equates to a loan of $39,958.42. Assuming that the APR and the length of the loan remain fixed, which of these is a correct statement? A. If Eduardo's monthly payment were $165, the amount of the loan that he is considering taking out would be more than $39,958.42. B. If Eduardo's monthly payment were $155, the amount of the loan that he is considering taking out would be less than $39,958.42. C. If Eduardo's monthly payment were $185, the amount of the loan that he is considering taking out would be less than $39,958.42. D. If Eduardo's monthly payment were $145, the amount of the loan that he is considering taking out would be more than $39,958.42.

Question

Mathematics

Alvin Franklin

20 May, 11:14

Eduardo is considering taking out a 30-year loan with monthly payments of $175 at an APR of 3.3%, compounded monthly, and this equates to a loan of $39,958.42. Assuming that the APR and the length of the loan remain fixed, which of these is a correct statement? A. If Eduardo's monthly payment were $165, the amount of the loan that he is considering taking out would be more than $39,958.42. B. If Eduardo's monthly payment were $155, the amount of the loan that he is considering taking out would be less than $39,958.42. C. If Eduardo's monthly payment were $185, the amount of the loan that he is considering taking out would be less than $39,958.42. D. If Eduardo's monthly payment were $145, the amount of the loan that he is considering taking out would be more than $39,958.42.

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Answers (1)

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Yosef Haley · Answer 1

165 * ((1 - (1+0.033:12) ^ (-12

*30)) : (0.033:12)) = 37,675.08 ... wrong

145 * ((1 - (1+0.033:12) ^ (-12

*30)) : (0.033:12)) = 33,108.40 ... wrong

185 * ((1 - (1+0.033:12) ^ (-12

*30)) : (0.033:12)) = 42,241.76 ... wrong

155 * ((1 - (1+0.033:12) ^ (-12

*30)) : (0.033:12)) = 35,391.75 ... correct

B. If Eduardo's monthly payment were $155, the amount of the loan that he is considering taking out would be less than $39,958.42