Application Of Economic Mathematics In Periodical Installation System

Muhammad Iqbal Al-Banna Ismail, Depie Hernawati, Yusup Supena

Abstract


This paper provides financial planning aspect by modeling the impact of mortgage rate changes on the size of payments for ARMS. This study uses a simulation approach to model the choice between a fixed rate mortgage (FRM} and an adjustable rate mortgage (ARM). Our simulations help assess therisks and benefits of choosing an ARM rather than a FRM. We represent the risk of the ARM with distributions of present value cost for a variety of mortgage lifeperiods.

Keywords


Annuity, Fixed rate mortgage (FRM} dan Adjustable rate mortgage (ARM)

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References


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DOI: https://doi.org/10.47194/ijgor.v3i4.189

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