1.) CMO. Suppose a CMO has five tranches. Each tranche consists of a $200,000 loan ($1,000,000 total outstanding), $100,000 of which is retired each year. Interest is paid annually on the amount of the loan outstanding in each tranche. The rate of interest varies with the expected life of each tranche. The interest rates start at 5% for tranche A and rise to 9% for tranche E. How much total interest across all tranches will be paid in year 5?

Can this be demonstrated in Excel?