1.Consider the following fixed-rate mortgage: Maturity = 360 months Amount borrowed = $200,000 Annual mortgage rate = 7%

By constructing the amortization schedule for the first 3 months:

A.The Interest Payment in the second month is $____.

B.The Principle Repayment in the third month is $______.

Without constructing an amortization schedule:

C.The Mortgage Balance at the end of month 120 is $_____.

D.The Principle Repayment in month 120 is $_______.

NOTICE: For this problem, round everything (calculations and final answers) to 2 decimal places.

2.Consider a bond with the following characteristics: 30 years to maturity, 9.40% coupon rate, interest paid semi-annually, $1,000 par value, $1,018 call price, and no call protection. If rates change to 6.60% will the company gain from calling the bond? Assume that transaction cost is $261 .

Calculate the gain/loss from calling the bond. Round to 2 decimal places.