$($Q$)$ You are considering to buy a $$750,000$ property with a $80\%$ LTV ratio and

have two mortgage choices: a FRM or a FRM with an IO period. The lender

offers the following two loans:

Loan $1$: $30$ year FRM$,$ fully amortizing monthly payments; $8\%$ interest

Loan $2$: $30$ year FRM with $4$ year IO period, fully amortizing monthly payments;

$8\mathrm{.}15\%$ interest

Evaluate both loans $($show all work$)$ and check all the true statements with an

explanation why you chose your answers:

If I want to save on interest payments, I would choose Loan $2.$

If I want to minimize the payments in the first few years, I would choose

Loan $2.$

If I$\text{'}$d like to pay off the loan sooner, I$\text{'}$d choose Loan $1.$

If I want my payments to remain the same for the duration of the loan, I

would pick Loan $1.$