1. Mortley corp. is issuing a 20 year bond with a coupon rate of 6.75%. The interest rate of similar bonds is currently 9%. Assuming annual coupon payments, what is the fair value of the bond?
2. A mortgage is being paid with level monthly payments, which pay off the interest for that month, and provide some repayment of the principal. If the principal repayment in two successive months is $2000.00 and $2009.90, what is the nominal annual interest rate?