Mortgages, loans taken to purchase a property, involve regular payments at fixed intervals and are treated as reverse annuities. Mortgages are the reverse of annuities, because you get a lump-sum amount as a loan in the beginning and then you make monthly payments to the lender.

You've decided to buy a house that is valued at $1 million. You have $500,000 to use as a down payment on the house, and want to take out a mortgage for the remainder of the purchase price. Your bank has approved your $500,000 mortgage, and is offering a standard 30-year mortgage at a 12% fixed nominal interest rate called the loan's annual percentage rate or APR). Under this loan proposal, your mortgage payment will be per month.

a) $6,428.83
b) $5,143.06
c) $7,971.74
d) $6,943.13