Question: please solve them using formula. 6. You need a 20-year, fixed-rate mortgage to buy a new home for $500,000. Your mortgage bank will lend you

 please solve them using formula. 6. You need a 20-year, fixed-rate

please solve them using formula.

6. You need a 20-year, fixed-rate mortgage to buy a new home for $500,000. Your mortgage bank will lend you the money at a 4.5 percent APR for this 240-month loan, with interest compounded monthly. What is the monthly payment if the bank finances you the 100% of the purchase price. 7. Using the previous exercise, suppose now, you can only afford monthly payments of $1,000, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. What will be the amount of the balloon payment if you are to keep your monthly payments at $1,000? 8. You buy a two year zero coupon bond. The price is 98. It pays 100. You have a two year 10% coupon bond with face value 100. The spot rate for year 1 is 5%. What is the price of the 2 year coupon bond? 9. What is the yield to maturity for the two bonds from the previous exercise

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