HOUSE IN EMIRATES HILLS, DUBAI You are about to make your dream of a house of your own come true. For years you have been saving for this moment and now, after months of searching for a suitable house for your family of four, you have found a spacious three-bedroom detached house with a little garden just outside of Dubai and is about to sign the purchase contract. You feel comfortable with the financing arrangement you have made. Requiring a 10 percent down payment on the AED 4,700,000 price of the house, Your bank grants you a 18 year long term loan (mortgage) with fixed monthly payments at an annual percentage rate (APR) of 13%. you know that interest will be compounded monthly. Here are last minute questions that you took on you are ready to calcualte: 1. The size of the monthly payment required to pay off the loan over the 18 years period. 2. The total payments that you will be required to make over the life of the loan. 3. How much of the loan would still be outstanding after 20 years of payments. 4. The portion of the monthly payment that goes towards principal reduction versus interest coverage (use the first payment, the payment at the end of year 10, the payment at the end of year 20, and the very last payment as an example), and 5. How much interest you would have to pay in a given year (use the first and the last year as an example). Alternatively, you could borrow at a flexible rate starting at 8.25% percent per year based on a 10 percent down payment. You believe that interest rates will remain unchanged for several years but eventually will go up. More specifically, you estimate the resulting annual mortgage rate as follows: Year Mortgage Rate 8.25% 1-5 6-10 11-16 17-23 24-30 8.40% 8.85% 9.60% 10.20% 6. Calculate for each period the resulting monthly mortgage payments. 7. prepare the flexible amortization schedule based on your prediction of interest rate movements. 7. Over the full 30-year term, which mortgage would result in the lower total interest payments? 8. Overall, would you finance your dream house with a fixed or flexible mortgage? Explain