Suppose you have 300, 000 dollars saved up which you want to use as a downpayment for buying a house. You will use the same downpayment for any house that you purchase irrespective of the price. You have hired a real estate agent who is showing you houses priced at $750,000 and also at $700,000. The interest rate offered to you by the bank is 5.9%. The bank has agreed to amortize your mortgage over 30 years. What is the monthly payment for a $750,000 house?

Fixed Monthly payments for each of the 30 years are: $_________

If you decide to buy the cheaper $700,000 house how much would your monthly payments reduce per month?

Monthly payment for $750,000 house: $______

Monthly payment for $700,000 house: $______

Monthly Savings on the cheaper house: $_____