Asked by joy
Question content area top
Part 1
Determine whether the statement makes sense or does not makes sense, and explain your reasoning.
"I use the same formula to determine mortgage payments and payments for car loans."
Question content area bottom
Part 1
Choose the correct answer below.
A.
The statement makes sense because both are fixed installment loans.
B.
The statement does not make sense because with a car loan, the buyer is making the payments, and with a mortgage, the buyer is receiving the payments.
C.
The statement makes sense because all loans are calculated using the same formula.
D.
The statement does not make sense because the formulas are structured in different ways.
Part 1
Determine whether the statement makes sense or does not makes sense, and explain your reasoning.
"I use the same formula to determine mortgage payments and payments for car loans."
Question content area bottom
Part 1
Choose the correct answer below.
A.
The statement makes sense because both are fixed installment loans.
B.
The statement does not make sense because with a car loan, the buyer is making the payments, and with a mortgage, the buyer is receiving the payments.
C.
The statement makes sense because all loans are calculated using the same formula.
D.
The statement does not make sense because the formulas are structured in different ways.
Answers
There are no human answers yet.
Answered by
GPT-5 mini
A.
Reason: Both typical mortgages and car loans are amortizing (fixed-installment) loans, so the same loan-payment formula for an installment loan (Pmt = r·PV / [1 − (1+r)^−n] with r the periodic rate and n the number of payments) applies. (Of course terms, rates, compounding frequency, down payments, or special features can differ, but the basic payment formula is the same.)
Reason: Both typical mortgages and car loans are amortizing (fixed-installment) loans, so the same loan-payment formula for an installment loan (Pmt = r·PV / [1 − (1+r)^−n] with r the periodic rate and n the number of payments) applies. (Of course terms, rates, compounding frequency, down payments, or special features can differ, but the basic payment formula is the same.)
Submit Your Answer
We prioritize human answers over AI answers.
If you are human, and you can answer this question, please submit your answer.