Vivien wants to buy a house. The house she wants is listed for $300,000, and she wants to avoid PMI insurance. She can get a fixed-rate mortgage at 4.25% for 30 years. Don’t worry about taxes and insurance for any of these questions, just keep in mind that those would need to be considered as well.
(a) What down payment will she need?
(b) If Vivien makes her down payment and takes out the loan described, what will be her monthly payment?
(c) If Vivien makes her down payment and takes out the loan described, what will be the total cost of the house?

Variable rate cd’s = $90 treasury bills = $150 discount loans = $20 treasury notes = $100 fixed rate cds = $160 money market deposit accts. = $140 savings deposits = $90 fed funds borrowing = $40 variable rate mortgage loans $140 demand deposits = $40 primary reserves = $50 fixed rate loans = $210 fed funds lending = $50 equity capital = $120 a. develop a balance sheet from the above data. be sure to divide your balance sheet into rate-sensitive assets and liabilities as we did in class and in the examples. b. perform a standard gap analysis and a duration analysis using the above data if you have a 1.15% decrease in interest rates and an average duration of assets of 5.4 years and an average duration of liabilities of 3.8 years. c. indicate if this bank will remain solvent after the valuation changes. if so, indicate the new level of equity capital after the valuation changes. if not, indicate the amount of the shortage in equity capital.