Application Of Economic Mathematics In Periodical Installation System

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

Authors

  • Muhammad Iqbal Al-Banna Ismail Netherlands Maritime Institute of Technology, Malaysia
  • Depie Hernawati Department of Mathematics, Faculty of Mathematics and Natural Sciences, Padjadjaran University, Indonesia
  • Yusup Supena Department of Mathematics, Faculty of Mathematics and Natural Sciences, Padjadjaran University, Indonesia

Keywords:

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

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.

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Published

2022-11-03

Issue

Vol. 3 No. 4 (2022): International Journal of Global Operations Research (IJGOR), November 2022

Section

Articles
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