Economics

Calculate the duration of a one-year fixed payments loan with monthly payments of $150 and yield to maturity of 12%. Use this number to determine the % change in the price of this loan if interest rates increase to 14%.

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asked by Linda
  1. You have already specified that the duration is one year. Do you really want to know the principal that can be paid off in that time at that specified monthly payment rate?

    When refering to loans, one does not speak of the "yield to maturity"

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    posted by drwls
  2. I have no idea...

    I wrote out exactly what the problem says

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    posted by Linda

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