You just borrowed $500,000 using a 30 year home loan that's interest-only for the first 3 years, and principal and interest (P&I) for the remaining 27 years. The interest rate is 3.72% pa compounding monthly which is not expected to change. Which of the following statements is NOT correct? a. The effective monthly rate is 0.0031 per month, given as a decimal. If the interest rate rises, the IO and P&I monthly payments will rise. b. If the IO term was one year longer so the P&I term was one year shorter, then

You just borrowed $500,000 using a 30 year home loan that's interest-only for the first 3 years, and principal and interest (P&I) for the remaining 27 years. The interest rate is 3.72% pa compounding monthly which is not expected to change. Which of the following statements is NOT correct? a. The effective monthly rate is 0.0031 per month, given as a decimal. If the interest rate rises, the IO and P&I monthly payments will rise. b. If the IO term was one year longer so the P&I term was one year shorter, then

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 17P

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