When you purchase a home by securing a mortgage, the total paid toward the principal is your equity in the home. The graph in the figure below shows for a certain 30-year mortgage the equity, in dollars, accrued after a given number of monthly payments. Equity in dollars 400,000 350,000- 300,000 250,000- 200,000- 150,000- 100,000- 50,000 +A 0 0 60 120 180 240 300 360 Number of monthly payments (a) Is the graph concave up or concave down? concave up concave down (b) The graph is increasing. What does the concavity you identified in part (a) say about how the equity grows? Equity is increasing at a decreasing rate. Equity is increasing at an increasing rate. Equity is not changing. O Equity is decreasing at a decreasing rate. Equity is decreasing at an increasing rate. (c) Use the graph to estimate the amount of the mortgage.

When you purchase a home by securing a mortgage, the total paid toward the principal is your equity in the home. The graph in the figure below shows for a certain 30-year mortgage the equity, in dollars, accrued after a given number of monthly payments. Equity in dollars 400,000 350,000- 300,000 250,000- 200,000- 150,000- 100,000- 50,000 +A 0 0 60 120 180 240 300 360 Number of monthly payments (a) Is the graph concave up or concave down? concave up concave down (b) The graph is increasing. What does the concavity you identified in part (a) say about how the equity grows? Equity is increasing at a decreasing rate. Equity is increasing at an increasing rate. Equity is not changing. O Equity is decreasing at a decreasing rate. Equity is decreasing at an increasing rate. (c) Use the graph to estimate the amount of the mortgage.

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter9: Obtaining Affordable Housing

Section: Chapter Questions

Problem 2LTAI

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