You are purchasing a business building valued at $385,000. You can find a 30-year mortgage at 4.52%, or a 25-year mortgage at 4.2%, if you can put 16% down. You believe your business can support a $1,700 a month mortgage payment (not including taxes and insurance). Should you select a 25-year mortgage or a 30-year mortgage? Tell your reasons.

Using the PMT formula to determine the periodic payments for each of the mortgages

Pmt= p*r/(1-(1+r)-n)

P = Initial loan amount (385000*84%) = 323400

PMT = Periodic payments for the selected mortgage

r = rate - 4.52% and 4.2%- Compound rate = 0.0452/12 and 0.042/12

n = number of periods paid = 360 months and 300 months