Question: Check the statements and give explanation.
1) What is the present value of the savings between a thirty-year mortgage that has an interest rate of 9% and one that has an interest rate of10%? (Assume that payments are made at the end of the year and assume a discount rate of 9%). You must find the present value of the difference between the payments you would make on the 10% mortgage and the 9% mortgage.
2) You are going to buy a home for $500,000. You will finance 80% of the $500,000 with a thirty year fixed rate mortgage. If the annual interest rate on the mortgage is 4%, The first monthly interest payment will be $1,333.33
3) You are going to buy a home for $500,000. You will finance 80% of the $500,000 with a thirty year fixed rate mortgage. If the annual interest rate on the mortgage is 4%,The principal payment in month 13 will be $599.81.