Question 37 (5 points) You have decided to buy a house. The house costs $400,000 and you are required to make a 15% down payment. You want to use an amortization period of 20 years. You arrange a 5 year mortgage agreement with a 5.0% interest rate compounded semi-annually. Payments will be made bi-weekly (26 per year). a. How much do you need to borrow? b. What interest rate should be used in your calculations? c. What is the size of your bi-weekly mortgage payment (assuming you begin payments at the end of the first two-weeks)? d. How much will you still owe after 5 years? e. Assume that you find a house you love on sale for $630,000 and can put your current total savings of $50,000 towards the purchase, and borrow the rest. The bank pre-approves you for a mortgage eight times your current gross annual income at 7% interest. With a current gross income of $75,000 per year, and an expected tax rate of 33.3%, should you take out the mortgage? Why