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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.
If the entire mortgage pool is repaid after the second month, what is the second month's interest and principal payments?
A. $37,441 interest and $13,275 principal.
B. $13,275 principal and $37,441 interest.
C. $13,312 interest and $4,986,786 principal.
D. $4,986,786 interest and $37401 interest.
E. $37,401 interest and $4,986,786 principal.
Answer
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