You are buying a house and the mortgage company offers to let you pay a"point" (1.0% of the total amount of theloan) to reduce your APR from 6.08% to 5.83 % on your $ 403,000, 30-year mortgage with monthly payments. If you plan to be in the house for at least fiveyears, should you doit? (Note: Be careful not to round any intermediate steps less than six decimalplaces.)

The monthly mortgage payment at 6.08 % is $___ (Round to the nearestcent.)

The monthly mortgage payment at 5.83 % is $___ (Round to the nearestcent.)

The lower interest rate on the mortgage results in monthly savings of $___(Round to the nearestcent.)

The PV of the monthly savings is $___ (Round to the nearestcent.)

The balance of the mortgage at the end of five years at 6.08 % APR is $___ (Round to the nearestcent.)

The balance of the mortgage at the end of five years at 5.83 % APR is $___ (Round to the nearestcent.)

The principal reduction due to the lower interest rate is $___ (Round to the nearestcent.)

The PV of the principal reduction is $___ (Round to the nearestcent.)

The net benefit or cost is $___ (Round to the nearestcent.)

The net benefit is (negative or positive) therefore, you (should or should not) pay the point.