Question: it is very important that you show your work from the calculations (right down what you used as PV, i FV, n, cash flows,.....etc. in

it is very important that you show your work from the calculations (right down what you used as PV, i FV, n, cash flows,.....etc. in your calculation)

NCP bank extend a $400,000, 20-year mortgage at 5%. The interest rate increases to 6% soon after origination. Suppose the loan is expected to be prepaid in 9 years. What is the loss (interest rate risk) to the bank from the mortgage?

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