Average house price: $200000 Average apartment rental: $750 The average increase in rents/year: 5% The average increase in house 2% Housing loan term: 30 years Current housing market conditions require them to pay at least 20% down payment. The average standard interest rate on housing loans is 5%. This is the minimum interest rate that anyone has to pay. Borrowers also need to pay additional interest rates based on their credit profile. Additional interest rates for a loan depend on the credit score, and it is provided below in a table. Assume that there is no other mortgage loan related costs (i.e., closing costs, points, etc). Credit score Additional Interest rate >=800 0% 750-799 0.15% 700-749 0.50% 650-699 1.5% 600-649 3.0% (1) If R&B decide to purchase a house and their combined credit score is 720, what will be their monthly housing payments? However, your worksheet should be able to determine monthly payments for any credit score. (2) What will be the total cost of renting an apartment for over 30 years? What will be the total cost of purchasing a house for over 30 years? Compare and find what should be their decision if they want to stay for 30 years. (3) Tightening credit situations in the housing industry may require banks to decide to double the additional interest rates if the annual household income is less than $100000 and triple the additional interest rates if the annual household income is less than $50000. Incorporate this in your results and determine new monthly household payments. R&Bs combined household income is $74000. Your worksheet should be able to determine monthly payments for any credit score.