Ch 05- Assignment - Time Value of Money a Search Mortgages, loans taken to purchase a property, involve regular payments at fixed intervals and are treated as reverse annuities. Mortgages are the...

Extracted text: Ch 05- Assignment - Time Value of Money a Search Mortgages, loans taken to purchase a property, involve regular payments at fixed intervals and are treated as reverse annuities. Mortgages are the reverse of annuities, because you get a lump-sum amount as a loan in the beginning, and then you make monthly payments to the lender. You've decided to buy a house that is valued at $1 million. You have $250,000 to use as a down payment on the house, and want to take out a mortgage for the remainder of the purchase price. Your bank has approved your $750,000 mortgage, and is offering a standard 30-year mortgage at a 12% fixed nominal interest rate (called the loan's annual percentage rate or APR). Under this loan proposal, your mortgage payment will be v per month. (Note: Round the final value of any interest rate used to four decimal places.) Your friends suggest that you take a 15-year mortgage, because a 30-year mortgage is too long and you will pay a lot of money on interest. If your bank approves a 15-year, $750,000 loan at a fixed nominal interest rate of 12% (APR), then the difference in the monthly payment of the 15-year mortgage and 30-year mortgage will be v ?(Note: Round the final value of any interest rate used to four decimal places. ) It is likely that you won't like the prospect of paying more money each month, but if you do take out a 15-year mortgage, you will make far fewer payments and will pay a lot less in interest. How much more total interest will you pay over the life of the loan if you take out 30-year mortgage instead of a 15-year mortgage? O $1,365,290.21 O $1,480,992.77 O $1,596,695.33 O $1,157,025.60 Which of the following statements is not true about mortgages? O The ending balance of an amortized loan contract will be zero. O Mortgages are examples of amortized loans. O The payment allocated toward principal in an amortized loan is the residual balance-that is, the difference between total payment and the interest due. O Mortgages always have a fixed nominal interest rate. MacBook Air 80 888 esc F3 F2 F4 FS F11 ! @ # へ & 1 2 7 8 Q W E R T Y P %3D A D J K く > C V rol option command command option コ -の つ エ 44