We invite you to participate in our Quantitative Methods for Finance pop quiz. Challenge yourself with the question below!
Q. Suppose that a mortgage bank is willing to lend at an interest rate that makes the present value of an annuity that pays $1 per month for 360 months (30 years) equal to $200. If you were willing to make monthly mortgage payments of $6,000 for 30 years, how much would the bank be willing to lend to you?
A) $180,000
B) $1,200,000
C) $2,160,000
D) None of the above
Answer: