Question: 1) Loans with a longer term and a higher interest rate are necessarily less advantageous than those with a shorter term and a lower interest

1) Loans with a longer term and a higher interest rate are necessarily less advantageous than those with a shorter term and a lower interest rate.

True

False

2) Imagine a potential homebuyer, who calculated that they can spent $2,000 per month on mortgage payments. If they want to pay back their mortgage over 20 years and the interest rate is currently at 9% per year: How much money can they currently receive from a bank (calculate the Loan Amount). You can disregard any potential additional costs. Please show your calculations and final result.

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