Assume an FI originates a pool of short$-$term real estate loans worth $$31$ million with maturities of five years and paying interest rates of

$6$ percent $($paid annually$).$ The loans are amortized.

a$.$ What is the average payment received by the Fl $($both principal and interest$)$ if no prepayment is expected over the life of the loans?

b$.$ If the loans are converted into real estate certificates and the FI charges a $100$ basis points servicing fee $($including insurance$),$ what

a$.$ Average payment

b$.$ Average payment