1. Consider a shared appreciation mortgage (SAM) on a $250,000 mortgage with yearly payments. Current market mortgage rates are high, running at 13%, of which 10% is annual inflation. Under the terms of the SAM, a 15 year mortgage is offered at 5%. After 15 years, the house must be sold, and the bank retains $400,000 of the sale price. If inflation remains at 10%, what are the cash flows to the bank? To the owner?
2. Consider a 30 year graduated payment mortgage on a $250,000 mortgage with yearly payments. The stated interest rate on the mortgage is 6%, but the first annual payment is calculated assuming a 3% rate for the life of the loan. Thereafter, the annual payment will grow by 3.151222%. Develop an amortization table for this loan, assuming the initial payment is based on 30 years and the loan pays off in 15.