Question: Please show work!! 5. Suppose a borrower with two mortgages defaults. At the time of the default, the first lien has a balance of $100,000,

Please show work!! 5. Suppose a borrower with two mortgages defaults. At Please show work!!

5. Suppose a borrower with two mortgages defaults. At the time of the default, the first lien has a balance of $100,000, the second lien has a balance of $20,000. The borrower owes $3,000 in property taxes. The house sells for $85,000 in a foreclosure auction. How much of a deficiency will the second lien lender have? 6. Suppose you save $325 at an annual interest rate of r=4.25% compounded monthly. How much will you have in 3 years? 7. Suppose you sign up for an annuity in which you save $1000 per month for 35 years. The annuity promises you an annual interest rate of 3% compounded monthly. How much will the annuity be worth in 35 years? 8. Suppose you buy a 30 year zero coupon bond with a face value of $1000 and a 6% annual interest rate, compounded semi-annually. One minute after you buy the bond, the interest rate on this bond rises to 7%, compounded semi-annually. What is the percent change in the bond price? 9. A bank offers a 10 year annuity, with annual payments of $10,000 starting 1 year from today. If the annual discount rate is 6.7%, compounded once per year, how much should this annuity cost today? 5. Suppose a borrower with two mortgages defaults. At the time of the default, the first lien has a balance of $100,000, the second lien has a balance of $20,000. The borrower owes $3,000 in property taxes. The house sells for $85,000 in a foreclosure auction. How much of a deficiency will the second lien lender have? 6. Suppose you save $325 at an annual interest rate of r=4.25% compounded monthly. How much will you have in 3 years? 7. Suppose you sign up for an annuity in which you save $1000 per month for 35 years. The annuity promises you an annual interest rate of 3% compounded monthly. How much will the annuity be worth in 35 years? 8. Suppose you buy a 30 year zero coupon bond with a face value of $1000 and a 6% annual interest rate, compounded semi-annually. One minute after you buy the bond, the interest rate on this bond rises to 7%, compounded semi-annually. What is the percent change in the bond price? 9. A bank offers a 10 year annuity, with annual payments of $10,000 starting 1 year from today. If the annual discount rate is 6.7%, compounded once per year, how much should this annuity cost today

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