You have the opportunity to invest in several annuities. Which of the following 10 -year annuities has the greatest present value (PV)? Assume that all annuities earn the same positive interest rate. An annuity that pays $500 at the end of every six months An annuity that pays $1,000 at the end of each year An annuity that pays $1,000 at the beginning of each year An annuity that pays $500 at the beginning of every six months An ordinary annuity selling at $8,860.53 today promises to make equal payments at the end of each year for the next six years ( N ). If the annuity's appropriate interest rate (I) remains at 8.00% during this time, the annual annuity payment (PMT) will be You just won the lottery. Congratulations! The jackpot is $10,000,000, paid in six equal annual payments. The first payment on the lottery jackpot will be made today. In present value terms, you really won -assuming annual interest rate of 8.00%. (Note: Round intermediate calculations to the nearest whole number.) 15. Mortgage payments Mortgages, loans taken to purchase a property, involve regular payments at fixed intervals and are treated as reverse annuities. Mortgages are the reverse of annuities, because you get a lump-sum amount as a loan in the beginning, and then you make monthly payments the lender. You've decided to buy a house that is valued at $1 million. You have $350,000 to use as a down payment on the house, and want to take out a mortgage for the remainder of the purchase price. Your bank has approved your $650,000 mortgage, and is offering a standard 30 -year mortgage at a 10% fixed nominal interest rate (called the loan's annual percentage rate or APR). Under this loan proposal, your mortgage payment will be per month. (Note: Round the final value of any interest rate in percentage form to four decimal places.) Your friends suggest that you take a 15-year mortgage, because a 30 -year mortgage is too long and you will pay a lot of money on interest. If your bank approves a 15 -year, $650,000 loan at a fixed nominal interest rate of 10% (APR), then the difference in the monthly payment of the 15 -year mortgage and 30-year mortgage will be . (Note: Round the final value of any interest rate in percentage form to four decimal places.) It is likely that you won't like the prospect of paying more money each month, but if you do take out a 15 -year mortgage, you will make far fewer payments and will pay a lot less in interest. How much more total interest will you pay over the life of the loan if you take out 30 -year mortgage instead of a 15-year mortgage? $1,018,653.70$939,071.38$795,823.20$1,098,236.02 Which of the following statements is not true about mortgages? The ending balance of an amortized loan contract will be zero. Every payment made toward an amortized loan consists of two parts-interest and repayment of principal. If the payment is less than the interest due, the ending balance of the loan will decrease. Mortgages are examples of amortized loans