Pls help correctly You just borrowed $400,000 using a 25 year home loan that's interest-only for thefirst 5 years, and principal and interest (P&I) for the remaining 20 years.The interest rate is 5.4% pa compounding monthly which is not expected tochange.Which of the following statements is NOT correct?Select one:a.) The effective monthly rate is 0.045 per month, given as a decimal. If the interestrate falls, the IO and P&I monthly payments will fall.b.) If the IO term was one year shorter so the P&I term was one year longer, thenthe monthly payments over the P&I term would be lower.c.) The IO loan's perpetuity factor' is 222.222222, while the P&I loan's annuity factoris 146.573495.d.) The IO loan payments will be $1,800 per month, rounded to the nearest cent.e.) The P&I loan payments will be $2,729.01 per month, rounded to the nearestcent.

In Interest only loan periodic interest is paid at regular intervals and principal remains unpaid.…

Answered: You just borrowed $400,000 using a 25…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 31P

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