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Consider a 15-year, fixed-rate mortgage for $150,000 at a nominal rate of 8%. The loan comes with a facility to pay end-of-year installments. What is
Consider a 15-year, fixed-rate mortgage for $150,000 at a nominal rate of 8%. The loan comes with a facility to pay end-of-year installments. What is the duration of the loan? If interest rates increase to 8.25% immediately after the mortgage is made, how much is the loan worth to the lender?
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