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Question
Overseas bank is pooling 50 similar and fully amortized mortgages into a pass-through security. The face value of each mortgage is $100,000 paying 180 monthly interest and principal payments at a fixed rate of 9 percent per annum.
For the first monthly payment, what are the interest and principal portions of the payment?
A. $37,500 principal and $13,213 principal.
B. $37,500 interest and $13,213 principal.
C. $37,500 principal and $7,809 interest.
D. $37,500 interest and $7,809 principal.
E. $37,500 interest and $17,756 principal.
Answer
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