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ABC bank can provide you with a 30-year FA-FRM mortgage, with an annual interest rate of 7%. In order to receive this rate you will

ABC bank can provide you with a 30-year FA-FRM mortgage, with an annual interest rate of 7%. In order to receive this rate you will need to pay 1.5 points to the lender. You will be making monthly payments equal to 1,663.26.

(a) Evaluate the amount of mortgage that you can get from ABC bank.

(b) What will be your IRR if you stay in this mortgage till maturity?

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