Mark and Alicia Story, recently married, have decided that they want to buy a $600,000 house. They are planning

to give 20% down payment and finance the rest with a mortgage. Mark and Alicia are now ready to meet with

Chris Vaughan, the loan officer for First United National Bank. The meeting is to discuss the mortgage options

available to the company to finance the property.

Chris begins the meeting by discussing a 30?year mortgage. The loan would be repaid in equal monthly

installments. Because of the previous relationship between Mark and the bank, there would be no closing costs for

the loan. Chris states that the APR of this loan would be 4.125 percent. Alicia asks if a shorter mortgage loan is

available. Chris says that the bank does have 25?year, 20?year and 15?year mortgages available at 4.0, 3.75 and 3.5

percent respectively.

Mark decides to ask Chris about a