The mortgage constant (MC)factor calculates the payment per dollar borrowed. The numerator of the MC factor is (i)(1 + i)ⁿ.The denominator of the MC factor is:

Question

Quizplus · Accepted Answer

The denominator of the MC factor is (1 + i)ⁿ - 1. This is calculated by subtracting one from the numerator, which is the PV of an annuity due formula (i.e. PV = PMT * ((1 - (1 + r)^(-n)) / r) * (1 + r)).

The Mortgage Constant (MC)factor Calculates the Payment Per Dollar Borrowed