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 $350,000 to use as a down payment on the house, and want to take out mortgage for the remainder of the purchase price. Your bank has approved your $650,000 mortgage, and is offering a standard 30 -year mortgage at a 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 used to four decimal places.) 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, $650,000 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 used to four decimal places. ) It is likely that you won't like the prospect of paying more 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 interest. How much more total interest will you pay over the life of the loan if you take out a 30 -year mortgage instead of a 15 -year mortgage? $1,019,121.41 $1,098,740.27 $796,188.60 $939,502.55