15. Consider a shared-appreciation mortgage (SAM)

on a $250,000 roortgage mth yearly paynvents.

rent market mortgage rates are high, running at 13%, 10% of which is annual inflation. Under the terms of the SAM, a 15-year mortgage is offered at 5%. After 15 years, the house must be sold, and the bank retains $400,000 of the sale price. If inflation remains at 10%, what are the cash flows to the bank? To the owner?13%, 10% of whch is annual inflation. Under the terms of the SAM, a 15-year mortgage is offered at 5%. After 15 years, the house must be sold, and the bank retains $400,000 of the sale price. If inflation remains at 10%, what are the cash flows to the bank? To the owner?