A bondholder owns 10-year government bonds with a $1 million face value and a 4 percent...

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A bondholder owns 10-year government bonds with a $1 million face value and a 4 percent coupon that is paid annually. The bon

You obtain a $250,000, 15-year fixed-rate mortgage. The annual interest rate is 3.25 percent. What is the total monthly payme

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Answer 1

Answer #1

Answer(2):

Monthly payment on Mortgage formula:

M = P[r(1+r)n / ((1+r)n -1)]

Where M = Monthly payment, r = rate of interest(monthly), n = number of years(monthly)

Given: P = $250000, r: 3.25%*1/12 = .27%, n: 15*12 = 180

Putting all the above values in the formula, we get:

M = 250000(.0027(1+.0027)180 / ((1+.0027)180 - 1)]

M = $1756.67 or $1757

Option "d" is correct

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Answer 2

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A bondholder owns 10-year government bonds with a $1 million face value and a 4 percent...

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