Alice is buying a house with 625K. She is making 20% deposit. And get a mortgage on the balance. A bank offers her two options. 1) 30 year term, fixed interest rate 4%.

2) Pay $10,000 upfront fee to buy down the rate. Still 30 year term, but at 3.75%

Explain your reason.

By opting for the second option, Alice would save $ 15,740.00  in total mortgage cost

Step-by-step explanation:

In order to determine the better of the two options available, we need to determine the total cost under each option as follows:

Option 1:

cost of house=$625,000

loan amount=$625,000-(20%*$625,000)=$500,000

loan amount=monthly payment*(1-(1+r)^-n/r

monthly payment is the unknown

r=monthly interest rate=4%/12=0.33333333%

n=number of monthly payments in 30 years=30*12=360

500,000=monthly payment*(1-(1+0.33333333% )^-360/0.33333333%

500,000=monthly payment*(1-0.301795869 )/0.003333333

500,000=monthly payment*0.698204131 /0.003333333

monthly payment=500,000*0.003333333 /0.698204131

monthly payment=$ 2,387.08  

total monthly payments=$ 2,387.08*360=$859,348.80

Option 2:

upfront fee=$10,000

loan amount=monthly payment*(1-(1+r)^-n/r

monthly payment is the unknown

r=monthly interest rate=3.75%/12=0.3125%

n=number of monthly payments in 30 years=30*12=360

500,000=monthly payment*(1-(1+0.3125%  )^-360/0.3125%

500,000=monthly payment*(1-0.325222459  )/0.003125

500,000=monthly payment*0.674777541  /0.003125  

monthly payment=500,000*0.003125  /0.674777541=$2,315.58  

Total cost=total monthly payments+upfromt fee

total cost=($2,315.58 *360)+$10,000=$843,608.80  

savings by opting for the second option=$859,348.80-$843,608.80  

4a. is 3 miles every hour

4b. is 1/3 of an hour per mile

step-by-step explanation:

step-by-step explanation:

let

we know that

the y-intercept is the y-coordinate of the point when the value of x is equal to zero

so

the y-coordinate of the point a is the y-intercept

the answer part a) is

the value of y-intercept is

part b) find the slope m

we know that

the value of the slope is equal to

substitute the values

therefore

the answer part b) is

the value of the slope is equal to

the general answer is

the slope is

the value of y-intercept is