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1. Deciding to Buy. Dave and Diane Starr of New Orleans,Louisiana, both of whom are in their late 20s, currently arerenting an unfurnished two-bedroom apartment for $1,200 per month,plus $230 for utilities and $34 for insurance. They have found acondominium they can buy for $170,000 with a 20 percent downpayment and a 30-year, 6.5 percent mortgage. Principal and interestpayments are estimated at $860 per month, with property taxesamounting to $150 per month and a homeowner's insurance premium of$900 per year. Closing costs are estimated at $4,200. The monthlyhomeowners association fee is $275, and utility costs are estimatedat $240 per month. The Starrs have a combined income of $90,000 peryear, with take-home pay of $5,800 per month. They are in the 25percent tax bracket, pay $225 per month on an installment loan (tenpayments left), and have $39,000 in savings and investments outsideof their retirement accounts.(d) Available financial information suggests that mortgage ratesmight increase over the next several months. If the Starrs waituntil the rates increase 1/2 of 1 percent, how much more will theyspend on their monthly mortgage payment?N30 x 12 = 36030 x 12 = 360I/Y6.5 / 12 = 0.54177 / 12 = 0.5833PV170,000 x (1 - 0.20) = 136,000170,000 x (1 - 0.20) = 136,000PMTCPTCPTFV00Total payments (PMT x 360)Total financing costs (Total payments - PV)