1) Consider a $100,000, 30-year, 6.2% mortgage with monthly payments. What portion of the payments during...

1) Consider a $100,000, 30-year, 6.2% mortgage with monthly payments. What portion of the payments during the first 34 months goes toward interest?

2) Orlando Builders Inc. issued a bond with a par value of $1,000, a coupon rate of 8.25% (semiannual coupon), and a yield to maturity of 6.60%? The bond has 15 years to maturity. What is the value of the bond?

Solutions

Expert Solution

1.
=(PMT(6.2%/12,12*30,-100000)*34-(100000-FV(6.2%/12,34,PMT(6.2%/12,12*30,-100000),-100000)))/(PMT(6.2%/12,12*30,-100000)*34)=82.9480091442749%

2.
=PV(6.6%/2,2*15,-8.25%*1000/2,-1000)=1155.609048695

jeff jeffy answered 2 years ago

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