Question

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.

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