Part II: Selling the HousePart II: Selling the House Suppose that after living in the house for 10 years, you decide to sell it. The economy experiences ups and downs, but in general the value of real estate increases over time. Recall the original purchase price (you can click back to Question 1 if you need to). Original purchase price (from Question 1)=$Original purchase price (from Question 1)=$ 254800 To approximate the future value of an investment such as real estate, you will use the compounded interest formula: PN=P0(1+rk)NkPN=P0(1+rk)Nk This is just an approximation, so we'll use an annual compounding period (so, k=1k=1). Find the future value of the home 1010 years after you purchased it assuming a 4%4% interest rate. Use the full purchase price of the home from the previous problem (Question 1) as the principal (or initial value, P0P0) in the compound interest formula. Future value of home=$Future value of home=$ This "Future value" is the price you will sell the house for after you've owned it for ten years. Now you will answer the question of whether or not you have made or lost money with this investment. You will need several pieces of information in order to answer the question. You will need the amount of your down payment (from Question 1), the amount you paid toward the mortgage over ten years (your monthly payment from Question 1 times the number of payments), and finally, the amount of principal you still owe on the mortgage. Down payment=$Down payment=$ Mortgage paid over 10 years=$Mortgage paid over 10 years=$ To find the principal balance on the mortgage, you will use the Loan Formula: P0=P0= d(1(1+rk)Nk)(rk)d(1-(1+rk)-Nk)(rk) (See p.214 of your text in the Finance module for help. In this formula, dd is the monthly payment and rr is the annual interest rate expressed as a decimal from Part IPart I, so r=r=; NN is the number of years remaining on the loan, and, of course, k=12k=12.) Principal balance on mortgage after 10 years=$Principal balance on mortgage after 10 years=$ To determine whether or not you've made or lost money, you must compare the "expenses" (down payment + mortgage paid + principal balance) to the "return" (future value of the home). Find the total "expenses". Expenses=$Expenses=$ After 1010 years, did you lose or gain money from selling the house? Answer:Answer: Select an answer lost gained How much (did you lose or gain)?