Your parents bought a new house today. Their principal and interest monthly payments are calculated to be $945.03. Loan terms are as follows: original mortgage balance is $119,899.00, the amortization period is 15 years, and the annual interest rate is 4.95% compounded monthly.

$____________14. What portion of their first payment will be interest?

$____________15. What portion of their first payment will be principal?

$____________16. Assuming your parents paid the minimum down payment, how much did they pay for the house if the bank utilizes a maximum loan to value ratio of 75%?

$____________17. In reading their mortgage and promissory note, you determine they have the right to change the amortization period of the loan from 15 years to 30 years within the first 7 days of closing. How much will their monthly payment decrease if they increase the amortization period from 15 years to 30 years?

$____________18. Suppose that instead of buying this house they rented an apartment for $700 per month and therefore saved $245.03 per month. How much would they have in savings at the end of 15 years? Assume the annual interest rate available to them is 6.5% compounded monthly. Ignore tax ramifications.