Consider the following information about the expected monthly cash flows for an MBS:

Total principal paid $(1000$s$)1,006$

Scheduled principal paid $(1000$s$)827$

Gross interest paid $(1000$s$)3,110$

Service fees $(1000$s$)364$

Insurance$/$guarantee fees $(1000$s$)88$

What is the net amount that MBS investors will receive?

Enter answer in thousands.

You Answered

$2,658,000$

Correct Answer

$3,664$ margin of error $+/-1\%$

Review the difference between gross and net interest, and consider what happens with all principal repayments. Need the correct formula to get the correct answer of $3,664$