Question 2: Angela and Bill have just graduated from SMU and have started new jobs. They want to save for the down payment on the purchase of a new house in one year's time. They have met with their bank, who have indicated they will lend Angela & Bill 97% of the purchase price of their new home, which means Angela & Bill require a 3 % down payment. To save for the down payment, Angela & Bill plan to invest $1500 in an investment account each month for one year (starting at the end of this month). The investment account has an APR of 8% compounded monthly. At the end of the year, all of these funds will be used for a down payment. a) Calculate what they are able to save as a down payment. b) Based on what they are able to save as a down payment, what is the maximum mortgage Angela & Bill can secure from the Bank? (Please round to the nearest dollar). c) Now that they know the amount of the mortgage (from part b), they must decide on the terms of the mortgage. They have been quoted a rate of 5% for a 5-year term but they are unsure of the amortization they should select. Bill wants to take a 25-year amortization so the payments will be lower, but Angela vaguely remembers something from her Finance class about a shorter amortization being better. Here are the options: Option #1: 25-year amortization with monthly payments Option #2: 20-year amortization with monthly payments What are the monthly mortgage payments under option #1? d) How much is outstanding on the mortgage under option #1 at the end of the 5- year term? e) Calculate the difference in total interest paid (over the amortization period) between the 2 options if the interest rate stays fixed at 5%