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(Solved): Problem 3. Problems involving the amount of money required to pay off a mortgage over a fixed period ...



Problem 3. Problems involving the amount of money required to pay off a mortgage over a fixed period of time involve the ordinary annuity equation P[₁ Mr = P (1 + r)" Here, M is the amount of the mortgage, P is the amount of each payment, and r is the interest rate per period for the n payment periods. Suppose that a 25-year home mortgage in the amount of $300,000 is needed and that the borrower can afford house payments of at most $2000 per month. Turn the problem into a rootfinding problem, and use Newton's method and the provided MATLAB scripts to find the maximum yearly interest rate that the borrower can afford to pay. Choose a reasonable initial guess xo for Newton's method, and use the tolerance & = 10-12.

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please provide matlab code and outcome. thanks
Problem 3. Problems involving the amount of money required to pay off a mortgage over a fixed period of time involve the ordinary annuity equation Here, is the amount of the mortgage, is the amount of each payment, and is the interest rate per period for the payment periods. Suppose that a 25 -year home mortgage in the amount of is needed and that the borrower can afford house payments of at most per month. Tum the problem into a rootfinding problem, and use Newton's method and the provided MATLAB scripts to find the maximum yearly interest rate that the borrower can afford to pay. Choose a reasonable initial guess for Newton's method, and use the tolerance .


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To turn the problem into a root-finding problem, we need to find the interest rate at which the mont...
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