1. Yield maintenance - the loan was originated with a 7.5% rate, on $350,000 loan, 30-year amortization with a ten-year term. With 2.5 years remaining on the term the borrower wants to prepay the loan with a current interest rate for 2.5 years of 3.75%, what is the prepayment fee?
2. The current price of silver is $16.50 per ounce. Storage costs are $1.50 per ounce per year. Storage costs are payable in two installments, half today and half in six months. The term structure is flat at 4%. Compute the futures price for a one ounce one year contract.