Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for...

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Ann is looking for a fully amortizing 30 year Fixed RateMortgage with monthly payments for $3,200,000. Mortgage A has a4.38% interest rate and requires Ann to pay 1.5 points upfront.Mortgage B has a 6% interest rate and requires Ann to pay zero feesupfront.
(A) Assuming Ann makes payments for 30 years, what is Annâ€™sannualized IRR from mortgage A?
(B) Assuming Ann makes payments for 30 years, what is Annâ€™sannualized IRR from mortgage B?
(C) Assuming Ann makes payments for 2 years before she sells thehouse and pays the bank the balance, what is Annâ€™s annualized IRRfrom mortgage A?
(D) Assuming Ann makes payments for 2 years before she sells thehouse and pays the bank the balance, what is Annâ€™s annualized IRRfrom mortgage B?

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ANALYSIS OF MORTGAGE ARateMonthly interest rate438120365NperNumber of months 3012360PmtMonthly mortgage payment3200000PVAmount of loan640537778Using PV function of excel with Rate0365 Nper360Pmt3200000APV15Amount paid upfron 15 See Answer

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