1. Determine which of the following statements about mortgages are correct: I All else being equal, a mortgage with a lower interest rate will have a lower total interest paid. II All else being equal, a mortgage with a lower initial value will have a higher total interest paid. III All else being equal, a mortgage with a higher initial value will have a higher monthly payment.

a) None are correct

b) Only I is correct

c)Only II is correct

d)Only III is correct

e)Only I and II are correct

f)Only I and III are correct

g)Only II and III are correct

h)All are correct

2.

3.

Which of the following loans results in the greatest monthly payment? $210,000 at 9.25% for 15 years. ob) $280,000 at 2.50% for 15 years. c) $430,000 at 4.50% for 30 years. d) $250,000 at 8.25% for 15 years. $410,000 at 5.75% for 30 years. f) $80,000 at 6.75% for 30 years. You are considering a mortgage for 15 years with initial value $260,000, and annual interest rate 7.00%. You can reduce your interest rate by buying points. The bank will sell you a point for 1% of the initial value of the loan. Each point you buy reduces your interest rate by 0.50%. You are considering buying 2 points. If you buy these points, how long until your lower monthly payments pay back the cost for these points? 31 months. ob) 33 months. 35 months. od) 37 months. 41 months. of) 44 months