1. Given the duration of a $100,000 fixed-rate, 30-year mortgage with a nominal annual rate of 7.0% is equal to 10.15. What is the expected percentage change in value if the required rate drops to 6.5% immediately after the mortgage is issued? (Hints: you should use the formula , note that is the change of the interest rate, i is the initial interest rate, it is 7% in this question.) 2. The value of a $100,000 fixed-rate, 30-year mortgage falls to $89,537 when interest rates move from 5% to 6%. What is the approximate duration of the mortgage? (Hints: you should use the formula note that i is the initial interest rate, it is 5% in this question.)