Question
PLEASE ANSWER BOTH QUESTIONS THANK YOU A bank makes a 30 year Fully Amortizing FRM for $2,400,000 at an annual interest rate of 6.25% compounded
PLEASE ANSWER BOTH QUESTIONS THANK YOU
- A bank makes a 30 year Fully Amortizing FRM for $2,400,000 at an annual interest rate of 6.25% compounded monthly, with monthly payments. What is the difference between the balance and the market value of the loan after 36 monthly payments if the interest rate rises to 8%?
(Give the absolute value of the difference, so the answer should be a positive number.)
2. A bank makes a 30 year Fully Amortizing FRM for $2,400,000 at an annual interest rate of 8% compounded monthly, with monthly payments. Suppose inflation is 4% per year, compounded monthly. What is the real value of the 120th payment?
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Analysis for Financial Management
Authors: Robert C. Higgins
12th edition
1259918963, 9781260140729 , 978-1259918964
