A property is available for sale that could normally be financed with a fully amortizing $$82,800$ loan at a $10$ percent rate with monthly

payments over a $25-$year term. Payments would be $$752\mathrm{.}40$ per month. The builder is offering buyers a mortgage that reduces the

payments by $50$ percent for the first year and $25$ percent for the second year. After the second year, regular monthly payments of

$$752\mathrm{.}40$ would be made for the remainder of the loan term.

Required:

a$.$ How much would you expect the builder to have to give the bank to buy down the payments as indicated?

b$.$ Would you recommend the property be purchased if it was selling for $$5,000$ more than similar properties that do not have the

buydown available?

Complete this question by entering your answers in the tabs below.

Required A

How much would you expect the builder to have to give the bank to buy down the payments as indicated?

Note: Do not round intermediate calculations. Round your final answer to $2$ decimal places.

Down payment