Which of the following should be used to compute the monthly payments on a home loan?
A)future value of an annuity of $1 per period
B)present value of an annuity of $1 per period
C)future value of the amount of $1 at compound interest
D)present value of the amount of $1 at compound interest

Question

Quizplus · Accepted Answer

The present value of an annuity of $1 per period is the appropriate choice for calculating monthly payments on a home loan because it allows for the repayment of a loan through equal payments at regular intervals. This formula takes into account the interest rate, the loan amount, and the number of payments to be made. The other options - the future value of an annuity of $1 per period, the future value of the amount of $1 at compound interest, and the present value of the amount of $1 at compound interest - are not directly applicable for calculating loan payments.

Which of the Following Should Be Used to Compute the Monthly