Question
1. Consider a pool of mortgages with balance at month 0 of $10,000,000 with interest rate of 11% and N=360. a. What is the monthly
1. Consider a pool of mortgages with balance at month 0 of $10,000,000 with interest rate of 11% and N=360.
a. What is the monthly payment received? ROUND YOUR ANSWER TO 4 DECIMAL PLACES and SHOW YOUR INPUTS TO YOUR CALCULATOR.
b. Suppose 20% of the scheduled payment is interest in month 1, and 80% of the scheduled payment is principal. Also, suppose the actual payments (including prepayments) received are $500,000. What is the Single Monthly Mortality Rate (SMM)? Indicate what formula(s) you use, and ROUND YOUR ANSWER TO 4 DECIMAL PLACES and SHOW YOUR WORK.
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Public Finance
Authors: Harvey S Rosen, Ted Gayer
9th International Edition
0071267883, 9780071267885
