1. A homeowner takes out a $277,000, 20-year fixed-rate mortgage at a rate of 5.90 percent. What are the monthly mortgage payments?
2. A bond sells for $500 and it pays $100 per annum til its maturity 28 years from now. The fiem, however, may call it back after 3 years at $1300. Derire its ytm and its call rate. Are they resonable? Why or why not? Which of the two does an investor make?
3. A homeowner takes a 30-year fixed-rate mortgage for $170,000 at 7.3 percent. After seven years, the homeowner sells the house and pays off the remaining principal. How much is the principal payment?