Ch 04: Homework Assignment - Time Value of Money Mortgages, loans taken to purchase a property, involve regular payments at fixed intervals and are treated as reverse annuities. Mortgages are the reverse of annuities, because you get a lump-sum amount as a loan in the beginning, and then you make monthly payments to the lender. You've decided to buy a house that is valued at $1 million. You have $200,000 to use as a down payment on the house, and want to take out a mortgage for the remainder of the purchase price. Your bank has approved your $800,000 mortgage, and is offering a standard 30-year mortgage 10% fixed nominal interest rate (called the loan's annual percentage rate or APR). Under this loan proposal, your mortgage payment will be per month. (Note: Round the final value of any interest rate in percentage form to four decimal places.) $9,474.58 ggest that you take a 15-year mortgage, because a 30-year mortgage is too long and you will pay a lot of money on interest. If you $7,018.21 a 15-year, $800,000 loan at a fixed nominal interest rate of 10% (APR), then the difference in the monthly payment of the 15-year B0-year mortgage will be - (Note: Round the final value of any interest rate in percentage form to four decimal $10,878.23 $8,772.76 Your friends suggest that you take a 15-year mortgage, because a 30-year mortgage is too long and you will pay a lot of money on interest. If your bank approves a 15-year, $800,000 loan at a fixed nominal interest rate of 10% (APR), then the difference in the monthly payment of the 15-year mortgage and 30-year mortgage will be . (Note: Round the final value of any interest rate in percentage form to four decimal places.) $2,601.51 It is likely that you won't like the prospe $2.286.17 hore money each month, but if you do take out a 15-year mortgage, you will make far fewer payments and will pay a lot less in intere h more total interest will you pay over the life of the loan if you take out a 30-year mortgage $1,576.67 instead of a 15-year mortgage? $1,813.17 $1253 730 82