Tyler wants to buy a beach house as part of his investment portfolio. After searching the coast for a nice home, he finds a house with a great view and a hefty price of

$5,000,000.

Tyler will need to borrow from the bank to pay for this house. A local bank is advertising twenty-year loans with monthly payments at

6.5%.

What is the monthly payment of principal and interest for the loan? Tyler believes that the property will be worth

$5,500,000

in

seven

years. Ignoring taxes and real estate commissions, if Tyler sells the house after

seven

years, what will be the difference in the selling price and the remaining principal on the loan?

Question content area bottom

Part 1

If Tyler selects twenty-year loan with monthly payments at

6.5%,

what is the monthly payment?

$enter your response here

(Round to the nearest cent.)If Tyler sells the house after

seven

years, what will be the difference in the selling price and the remaining principal on the twenty-year loan?

$enter your response here

(Round to the nearest dollar.)