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You are aware that prepayments will shorten the average life of a mortgage. You are looking at a group of 15-year mortgages with annual installments.

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You are aware that prepayments will "shorten the average life of a mortgage. You are looking at a group of 15-year mortgages with annual installments. You are asked to compute the Macaulay duration for a 15-year mortgage which is prepaid immediately after the 3rd regular payment is made. The effective rate of interest on the mortgages is 6% per annum

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