You think of purchasing a house. The house costs $895,000. You have $150,000 in cash that you can use as a down payment on the house, but you need to borrow the rest of the purchase price. The bank is offering a 30-year mortgage that requires annual payments. (a) Suppose the bank offers an interest rate of 3%. What will your annual payments be? (b) Suppose the bank offers an interest rate of 7%. What will your annual payments be? Compare to (a). (c) Suppose the bank offers a teaser rate of 3% for the first five years. Then the rate increases to 7%. Compute the annual payment during the teaser phase and after the teaser phase has expired. (d) Suppose that the bank waves the requirement of a down payment. Repeat the calculation of (c), compare and interpret. (d) Can you think of a reason why teaser rates and the waving of downpayments are problematic? Are they