QUESTION 18 Ann buys a property that costs $1,000,000. She finances the purchase with a 700 LTV mortgage. She gets a 20 year interest only foredrate mortgage at an annual interest rate of 5, with annual compounding and annual payments. Ann must pay 2 points upfront in mortgage closing costs (as a % of the Joan amount). The loan bas a S/4/3/2/1 prepayment penalty structure (she must pay a 5 penalty if she prepays at any time in the first year, 4 penalty in the second year etc). Suppose Ann will sell the property in 3 years after her 3rd years mortgage payment and pay off the balance when she sells Carefully write out the NPV of Anns mortgage as a function of a general annual discount rate 1. Sample Answer: NPV-100+(591 105/12 TTTT Paragraph Arial 311200) BIE - T- Qi 50 XD0Q TT. @ Schups - 9