Alice takes a housing loan with 24 months to maturity, with a principal of 200,000. The interest rate is 6% per annum. There are no servicing or guaranteeing fees. The Single Month Mortality (SMM) is 2%. Compute the average life. If the loan has an annual yield of 6.3% per annum, what is the duration?

Alice takes a housing loan with 24 months to maturity, with a principal of 200,000. The interest rate is 6% per annum. There are no servicing or guaranteeing fees. The Single Month Mortality (SMM) is 2%. Compute the average life. If the loan has an annual yield of 6.3% per annum, what is the duration?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 15P

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