1.) Suppose Oppenheimer Bank is offering a 30-year mortgage with an EAR of 6.800%. If you plan to borrow $150,000, what will be your monthly payment? (Note: Be careful not to round any intermediate steps less than six decimal places.) Your monthly payment will be $______

2.) You are looking to buy a car and you have been offered a loan with an APR of 6%, compounded monthly.

a. What is the true monthly rate of interest? 0.5%

b. What is the EAR?

3.) You have just sold your house for $1,000,000 in cash. Your mortgage was originally a 30-year mortgage with monthly payments and an initial balance of $800,000.The mortgage is currently exactly 18 years old, and you have just made a payment. If the interest rate on the mortgage is 5.25% (APR), how much cash will you have from the sale once you pay off the mortgage? (Note: Be careful not to round any intermediate steps less than six decimal places.)

Cash that remains after payoff of mortgage is __________

4.) If the rate of inflation is 4.5%, what nominal interest rate is necessary for you to earn a 2.3% real interest rate on your investment? (Note: Be careful not to round any intermediate steps less than six decimal places.)

The nominal interest rate is ___%

5.) Use the table for the question(s) below.

Suppose the term structure of interest rates is shown below:

Term	1 year	2 years	3 years	5 years	10 years	20 years
Rate (EAR%)	5.00%	4.80%	4.60%	4.50%	4.25%	4.15%

What is the shape of the yield curve and what expectations are investors likely to have about future interest rates?

A. inverted; higher

B. inverted; lower

C. normal; higher

D. normal; lower