Question: 1. You wish to purchase a property for $600,000 and need to acquire a mortgage to finance $500,000 of the purchase price. A bank offers you a $500,000 fixed rate 30 year fully amortizing constant payment mortgage with a 3.5% rate. What will your monthly payment be on this loan? State you payments as a positive value rounded to the nearest cent.
2. You wish to purchase a property for $600,000 and need to acquire a mortgage to finance $500,000 of the purchase price. A bank offers you a $500,000 fixed rate 30 year fully amortizing constant payment mortgage with a 3.5% rate. The interest rate the lender quotes you is a nominal rate. What is the equivalent annual rate of interest on this loan? Round your answer to 3 decimal places. (Express your answer in the following manner: if your answer was five and three quarters percent, enter 5.750)
3. You wish to purchase a property for $600,000 and need to acquire a mortgage to finance $500,000 of the purchase price. A bank (Bank 1) offers you a $500,000 fixed rate 30 year constant payment mortgage with a 3.5% rate. Bank 2 offers you a loan that is identical in all ways, except this bank will offer you a 3.4% rate on your mortgage. If you plan to hold your mortgage until the maturity date, how much money will you save over the life of the loan by choosing to get a mortgage with Bank 2? Round your answer to the nearest cent.