1) Your aunt has $1,025,000 and wishes to retire. She expects to live for another 25 years, and she also expects to earn 7.5% on his invested funds. How much could she withdraw at commencement of each of next 25 years and finish up with zero in account?
2) Mortgage securities and loans are extremely complex financial instruments with the variety of difficult-to-analyze risks. For example, mortgage property exposes investor to risk of increasing interest rates and to risk of falling interest rates. Describe how can this occur? What could cause the homeowner to prepay, or not prepay, a mortgage loan? Why could a homeowner not prepay even if mortgage rate was much lower?
3) A bank has now launched the new savings account which earns rate of 6.85% compounded daily. Bank points out that rate of 6.85% are equal to earning 7.09% compounded annually. Write down the label that we should give to 7.09% in this example?