13. Mortgage payments 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 10% fixed nominal interest rate (called the loan's annual percentage rate or APR). Under this loan proposal, your mortgage payment will be $6,581.57 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 10% (APR), then the difference in the monthly payment of the 15-year mortgage and 30-year mortgage will be ?(Note: Round the final value of any interest rate used to four decimal places. ) $1,477.78 It is likely that you won't like the prospe payments and will pay a lot less in intere $1,699.45 instead of a 15-year mortgage? hore money each month, but if you do take out a 15-year mortgage, you will make far fewer more total interest will you pay over the life of the loan if you take out a 30-year mortgage $1,175,913.22 $1,084,045.00 $1,267,781.44 $918,682.20 $2,438.34 $2,142.78 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 a 30-year mortgage instead of a 15-year mortgage? O $1,175,913.22 $1,084,045.00 $1,267,781.44 $918,682.20