$($Q$)$ You can afford to pay up to $$4000$ in mortgage payments every month for

housing and have $$80,000$ in savings $($you don't anticipate and increase in

income$/$savings$).$ Which of the following mortgages would allow you to buy the

most expensive property?

A $30$ year fully amortizing FRM with $8\mathrm{.}2\%$ contract interest rate and $\mathrm{.}85$ LTV

$[$a$]$

A $25$ year FRM with $6\mathrm{.}5\%$ contract interest rate and $.9$ LTV$.[$b$]$

A $30$ year FRM with $8\mathrm{.}2\%$ contract interest rate, $9$ LTV and a balloon

payment of $$80,000$ at the end of the $5$ th year $[$c$]$

A $30$ year mortgage with an interest only period of $5$ years at a fixed

contract rate $8\%$ and $0\mathrm{.}95LTV.[$d$]$