1.Assume you have just graduated college and now wish to purchase a new house for $200,000. You currently have $17,500 saved for a down payment, so you will need to finance the rest of the purchase. Your local credit union offers you two options for a mortgage. You can either take a 30-year mortgage with a 5.25 percent interest rate or a 15-year mortgage with a 4.50 percent interest rate.

a.What would your monthly payments be under each option?

b.If you could only afford a monthly payment of $1,200, which option would you choose? Why?