Mortgage
A couple seeking to buy a home decides that a monthly payment of $800 fits their budget. Their bank's interest rate is 7.5%. The amount they can borrow, A, is a function of the time t, in years, it will take to repay the debt. If we denote this function by A = ƒ(t), then the following table defines the function.
|
t
|
A
|
t
|
A
|
|
5
|
40,000
|
20
|
103,000
|
|
10
|
69,000
|
25
|
113,000
|
|
15
|
89,000
|
30
|
120,000
|
(a) Find ƒ (20) and write a sentence that explains its meaning.
(b) Does ƒ(5 + 5) = ƒ(5) + ƒ(5) ? Explain.
(c) If the couple is looking at a house that requires them to finance $89,000, how long must they make payments? Write this correspondence in the form A = ƒ(t)