Q2. Jose is buying a $250,000 house. He is going to borrow money for 15 years to pay for the house. He is choosing between the two following mortgage options. Option A: 15 year fixed rate mortgage (the rate does not change over the 15 year payback period). Payments are made at the end of the month. The fixed interest rate is 6% per year, convertible monthly. Option B: 5 year adjustable. After the first five years, Jose will refinance the loan using a 10 year fixed rate mortgage. The 5 year rate is 5% per year, convertible monthly and does not change for 5 years. The interest rate on the 10 year loan could be greater or less than 5% based on market conditions at the time of the refinance. Set up an Excel worksheet to analyze these two options. What is the break-even interest rate in option B for payments after year 5 such that the total interest paid in option A is the same as the total interest paid in option B? Which option would you choose if you felt the 10 year interest rate after year 5 was going to be 7.5%? Q2. Jose is buying a $250,000 house. He is going to borrow money for 15 years to pay for the house. He is choosing between the two following mortgage options. Option A: 15 year fixed rate mortgage (the rate does not change over the 15 year payback period). Payments are made at the end of the month. The fixed interest rate is 6% per year, convertible monthly. Option B: 5 year adjustable. After the first five years, Jose will refinance the loan using a 10 year fixed rate mortgage. The 5 year rate is 5% per year, convertible monthly and does not change for 5 years. The interest rate on the 10 year loan could be greater or less than 5% based on market conditions at the time of the refinance. Set up an Excel worksheet to analyze these two options. What is the break-even interest rate in option B for payments after year 5 such that the total interest paid in option A is the same as the total interest paid in option B? Which option would you choose if you felt the 10 year interest rate after year 5 was going to be 7.5%