13. Mortgage payments Mortgages, loans taken to purchase a property, involve regular payments at fixed intervals and are treated as reverie annuaties. Mortgoges are the reverse of annultes, because you get a lump-sum ameunt as a lasa in the beginning, and then rou make monthly parments to the lender. You've decided to buy a house that is valued at 51 millon. Youi have $200,000 to use as a down poyment on the house, and want to take out a mortgape for the remainder of the purchase price. Your bank has approved your $500,900 mortoage, and is offering a standard 30 -year mertgage at a 9\%w fixed nominas interest rate (called the loan's annoal percentage rate or A AR ). Under this loan preposal, your mortgoge payment will He per month. (Note: Round the final value of any interest rate used to four decienal placesc) 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 approwes a 55 year, 5600,000 loan at a foxed nominal interest rate of 9% (APA), then the difference in the monthly poyment of the 15 -year mortgage and 30 -year mortgage will be T(Note: Round the final value of any interest rate used to four decimal places, ) It is likely that you won't lake the prospect of paying more money each month, but if you do take out a 15-year mortgage, you witl make far fewer payments and will pay a lot less in literest: How much more total interest will you pay over the Me of the loan if you take but a 30 -year mortgage inctead of a 15-year mortqage? $1,182,341,77$1,096,564,83$1,010,987.89$856,769.40 It is likely that you wont then the prospect of paying more money each month, but if you do take out a 15-year mortgage, you wili make far fawer payments and will pay a lot less in interest. How nuch more total interest will you pay over the life of the loan if you take out a 30-year mortgnge instead of a 15-yeat mortgage? 51,182,341.77 11,096,664,83 $1,010,987.89 $856,769,40 Which of the following statements is not true about mortgages? Every payment made toward an amortized loan consists of two parts-interest and repayment of prindpal. If the payment is less than the interest due, the ending balance of the loan will decrease. The ending balance an amortized loan contract will be zero. Mortgages are examples of amortixed loans