answer 25-30

The following text in bold letters applies to questions 25,26,27,28,29 and 30 Suppose you had to choose between a 8%30-year mortgage or an 7.5% mortitinge wirh 2 discount points. In other words, if you pay upfront 2 discount points ( 52,000 in this caur) the mortgage rate will drop from 8% to 7.5%. Assume you wished to borrow $100,000. Please tene Ercel 25) What is the monthly payment for the 8% mortgage? 26) What is the monthly payment for the 7.5% mortgage? 27) How much will your monthly payment will be reduced if you accept the 7.5% mortgege? (compared with the 8% mortgage) 28) Is it worth paying the 2 discount points if you are planning to keep this house for 5 years? 29) Is it worth paying the 2 discount points if you are planning to keep this bouse with the same mortguge for 12 years? 30) How long do you have to keep this house (and 7.5% mortgage) to break-even for paying 2 discount points