You have just made an offer on a new home and are seeking a
mortgage. You need to borrow $600,000.
a. The bank offers a 30-year mortgage with fixed monthly
payments and an interest rate of 0.5% per month. What is the amount of your
monthly payment if you take this loan?
b. Alternatively, you can get a 15-year mortgage with fixed
monthly payments and an interest rate of 0.4% per month. How much would your
monthly payments be if you take this loan instead?
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