# Question #1: A loan officer states, “Thousands of dollars can be saved by switching to a 15-yea

Question #1:

A loan officer states, “Thousands of dollars can be saved by switching to a 15-year mortgage from a 30-year mortgage.” Calculate the difference in payments on a 30-year mortgage at 9% interest versus a 15-year mortgage with 8.5% interest. Both mortgages are for \$300,000 and have monthly payments. What is the difference in total dollars that will be paid to the lender under each loan?

Question #2:

What are the differences between the bond&#39;s coupon rate, current yield, and yield to maturity?

Question #3:

Assume the total expense for your current year in college equals \$20,000. Approximately how much would your parents have needed to invest 21 years ago in an account paying 8% compounded annually to cover this amount?

Question #4:

Kessen Inc.&#39;s bonds mature in 7 years, have a par value of \$1,000, and make an annual coupon payment of \$70. The market interest rate for the bonds is 8.5%. What is the bond&#39;s price?