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Question
One hundred identical mortgages are pooled together into a pass-through security. Each mortgage has a $150,000 principal, a fixed annual interest rate of 8 percent (paid monthly), and is fully amortized over a term of 30 years.
If the entire mortgage pool is repaid after the second month, what is the second month's (liquidating) principal and interest payments?
A. $99,933 interest and $14,989,935 principal.
B. $100,000 interest and $10,065 principal.
C. $100,000 interest and $15,000,000 principal.
D. $99,933 principal and $14,989,935 interest.
E. $12,000 interest and $138,000 principal.
Answer
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