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Author Question: As applied to mortgage loans, which of the following statements is FALSE? A) Advertised rates are ... (Read 32 times)

MirandaLo

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on: Jul 10, 2018
As applied to mortgage loans, which of the following statements is FALSE?
 
  A) Advertised rates are annual percentage rates.
  B) A spreadsheet uses the periodic interest rate, not the annual percentage rate.
  C) By increasing the number of payments per year you increase your effective borrowing rate.
  D) You can find a monthly payment by dividing the annual payment by 12.

Question 2

A perpetuity pays 550 at the end of every month. The PV of the perpetuity is 36,000. What is the nominal annual rate (APR) on the perpetuity?
 
  A) 18.33
  B) 9.17
  C) 19.96
  D) 13.42
  E) 15.15


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xMRAZ

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Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: D
Explanation: D) A mortgage problem is VERY SIMILAR to a future value problem with an annuity.

Answer to Question 2

A


MirandaLo

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Reply 2 on: Jul 10, 2018
Great answer, keep it coming :)

dantucker

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Reply 3 on: Yesterday
Excellent

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