You decide to buy a house of $250,000 with loan amount of $200,000. The lender offers the

following three SAM

choices with $5,000 origination cost for each choice:

(1)

$200,000; 15 years; monthly payment; 0% interest rate; 50% of appreciated value of the

property in year 10. In addition, if the property value declines

in year 10, the lender pays

nothing.

(2)

$200,000; 15 years; monthly payment; 3% interest rate; 50% of change

d value of the

property in year 10

(3)

$200,000; 15 years; monthly payment; 5% i

nterest rate; 25% of changed value of the

property in year 10.

The housing market conditions:

a)

Home price will appreciate 5

0% in total for the next 10 years;

b)

Home price will stay the same

for the next 10 years

c)

Home price will decline 5

0% in total for the next 10 years.

Question:

If you hold the loan for only 10 years,

please find out the best choice for each

market condition.

Please provide a response in excel.