Mortgages, toons taken to purchase a property, envolve regular payments at fived 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 $300,000 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 $700,000 mortgage, and is offering a standard 30-year mortgage stia 12% fixed nominat interest rate (called the loan's animal percentage rate of APR). Under this loan proposal, your mortgage payment will be per month. (Note: Round the final value of any interest rate used to four dedmal places) Your friends suggest that you take a 15-year mortowe, because a 30-year mortgage is too long and you will pay a lot of money on interest. If your bank approves a 15-yoor, $700,000 tonn at a fixed nominal interest rate of 12% (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 try 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 motore, you will make tar fewer payments and will pay a lot less in interest. How much more total interest win you pay over the le of the loan is you take out a 30-year mortgage Instead of a 15 year morto? $1.490,250.06 $1.274,272,56 51,382,205,76 51.079,892.00 Which of the following statements is not true about mortgages? Mortgages always have a fixed nominal interest rate Mortgages are examples of amortized loans O The payment allocated toward principal in an amortired loan is the residual balance-that is, the difference between total payment and the interest due The ording balance of an amortized loan contract will be zero. After Shipra got a job, the first thing she bought was a new car. She took out an amortized loan for $45,000 with no ($0) down payment. She agreed to pay off the loan by making annual payments for the next four years at the end of each year. Her bank is charging her an interest rate of 10% per year. Yesterday, she called to ask that you help her compute the annual payments necessary to repay her loan. Calculate the annual payment and complete the following loan amortization table: Year Payment Interest Paid Principal Paid Ending Balance Beginning Amount $45,000.00 1 2. 3 4 $0.02 Hoyd is a divorce attorney who practices tow in Florida. He wants to join the American Divorce Lawyers Association (ADLA), a professional organization for divorce attorneys. The membership dues for the ADLA are $750 per year and must be paid at the beginning of each year. For instance, membership dues for the first year are paid today, and dues for the second year are payable one year from today. However, the ADLA also has an option for members to buy a lifetime membership today for $7,000 and never have to pay annual membership dues. Obviously, the lifetime membership isn't a good deal if you only remain a member for a couple of years, but if you remain a member for 40 years, it's a great deal. Suppose that the appropriate annual interest rate is 8.9%. What is the minimum number of years that Lloyd must remain a member of the ADLA so that the lifetime membership is cheaper (on a present value basis) than paying $750 in annual membership dues? (Note: Round your answer up to the nearest year.) 20 years O 18 years O 15 years 17 years In 1626, Dutchman Peter Minuit purchased Manhattan Island from a local Native American tribe. Historians estimate that the price he paid for the island was about 524 worth of goods, including beads, trinkets, coth, kettles, and axe heads. Marv people find it laughable that Manhattan Island would be sold for $24, but you need to consider the future value (FV) of that price in more current times. If the $24 purchase price could have been Invested at a 6% annual interest rate, what is its value as of 2018 (392 years later)? $229,513,515,853.71 $160,640,424,761.43 O $109,576,970,307.57 O $263,441,600,805.99