You just bought the first floor of the famous Egg-Plant Building for $250,000. You plan to rent the space to convenience stores. Your banker has offered you a mortgage with the following terms:

The mortgage is for the full amount of $250,000.

The mortgage will be repaid in equal monthly payments over 36 months, starting 1 month from now.

The annual interest rate on the mortgage is 8%, compounded monthly.

You have to pay the bank an initiation charge of $1,500 and 1 point.

a. What is the monthly payment you will pay the bank? (15 points)

b. What is the EAIR of the mortgage? (15 points)

c. Compute an amortization table that shows the amount of interest you can report for taxes each month. (15 points)