3 Ann got a 10 year Fixed Rate Mortgage for $100,000. The loan has constant annual payments and an annual interest rate of 5%. The closing cost for the loan is $2,000 (paid at the time of origination, t=0). Suppose Ann prepays the loan in year 4. Write the NPV of Ann's Mortgage (from Ann's perspective) for an annual discount ratek in each of the following cases. CF Note: the answer must take the form NPV (k)=CF0+ Note: only include one cash-flow for each time period 3a Fully Amortizing 10 + CF2 + CF3 + CF4 (1+k) * (1+k) * (1+k) (1+k)4 3b Partially Amortizing where the final balance is B0 = $50,000 3c Interest Only 3d Negatively Amortizing where the payment is PMT = $1,000 3e Negatively Amortizing where the payment is PMT=$0 4 Compute the IRR for each loan above 4a 4b 4c 4d 4e 5 Do closing costs raise the IRR more for loans with greater amortization? (Yes or No)