You just borrowed $400,000 using a 30 year home loan that's interest-only for the first 2 years, and principal and interest (P&I) for the remaining 28 years.

The interest rate is 3.12% 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 0.00026 per month, given as a decimal. If the interest rate rises, the IO and P&I monthly payments will rise.

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 384.615385, while the P&I loan's annuity factor is 223.877089.

d.The IO loan payments will be $1,040 per month, rounded to the nearest cent.

e.The P&I loan payments will be $1,786.69 per month, rounded to the nearest cent.