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Dan got a 1 0 year Fixed Rate Mortgage for $ 1 0 0 , 0 0 0 . The loan has constant annual payments
Dan got a year Fixed Rate Mortgage for $
The loan has constant annual payments and an annual interest rate of
The closing cost for the loan is $paid at the time of origination, t
Suppose Dan prepays the loan in year
Write the NPV of Dans Mortgage from Dans perspective for an annual discount rate k in each of the following cases.
Note: the answer must take the form
NPVkCFCFkCFkCFkCFk
Note: only include one cashflow for each time period
A Fully Amortizing
B Partially Amortizing where the final balance is B$
C Interest Only
Part D: Compute the IRR for each loan above.
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