1. A bank makes a 30-year Fully Amortizing FRM for $1,000,000 at an annual interest rate of 4% compounded monthly, with monthly payments. Suppose inflation is 2% per year, compounded monthly. What is the real value of the 20th payment?

Ann got a 15-year Fully Amortizing FRM for $1,000,000 at an annual interest rate of 7% compounded monthly, with monthly payments. After 5 years of payments, Ann can refinance the balance into a 10 year Fully Amortizing FRM at an annual interest rate of 5.25% compounded monthly, with monthly payments. If Ann refinances into this 10 year loan, what will be her monthly savings on her mortgage payment?

8988.28

700.00

774.13

8305.75

682.53