1. A STRIPS traded on February 1, 2018 matures in 16 years on February 1, 2034. The quoted STRIPS price is 58.75. What is its yield to maturity?
2. You have decided to buy a house. You can get a mortgage rate of 5.35 percent, and you want your payments to be $1,250 or less. How much can you borrow on a 30-year fixed-rate mortgage?
3. A STRIPS traded on May 1, 2016, matures in 18 years on May 1, 2034. Assuming a yield to maturity of 6.1 percent, what is the STRIPS price?
4. Consider a 20-year, $180,000 mortgage with an interest rate of 5.50 percent. After five years, the borrower (the mortgage issuer) pays it off. How much will the lender receive?