You just borrowed $1,100,000 using a 30 year home loan that's interest-only for the first 3 years, and principal and interest (P&I) for the remaining 27 years.

The interest rate is 5.04% pa compounding monthly which is not expected to change.

Which of the following statements is NOT correct?

Select one:

a.

The effective monthly rate is 0.0042 per month, given as a decimal. If the interest rate falls, the IO and P&I monthly payments will fall.

b.

If the IO term was one year longer so the P&I term was one year shorter, then the monthly payments over the P&I term would be higher.

c.

The IO loan's perpetuity factor is 238.095238, while the P&I loan's annuity factor is 185.436242.

d.

The IO loan payments will be $4,620 per month.

e.

The P&I loan payments will be $6,219.603664 per month.