a) Suppose you can afford a monthly payment of $700 for your mortgage. Use the loan formula to find the selling price of the house (P) that this corresponds to at the teaser rate of 3% APR compounded monthly. Assume a 30 year mortgage.

b) Now use the house price from part a) to determine the monthly payment at a rate of 5% APR, representing the true state of things once the period of enticement is over.