1. A bank makes a 30 year Fully Amortizing FRM for $800,000 at an annual interest rate of 4.5% compounded monthly, with monthly payments. What is the difference between the balance and the market value of the loan after 36 monthly payments if the interest rate rises to 5%?

(Give the absolute value of the difference, so the answer should be a positive number.)

2. A bank makes a 30 year Fully Amortizing FRM for $1,500,000 at an annual interest rate of 6% compounded monthly, with monthly payments. Suppose inflation is 2% per year, compounded monthly. What is the real value of the 120^th payment?

5. A bank originates a 30 year fully amortizing FRM at an annual interest rate of 4.5%. 9 years later the banks cost of funds is 6.20%. What is the banks NIM on this loan?

(Your answer can be positive or negative, use the correct sign!)