First Mortgage Investors purchases a $100,000 Face value MBS carrying a coupon of 9 percent and a maturity of 30 years.

1. What is the monthly payment on the MBS?

2. What is total interest paid over 30 years?

3. How much interest is paid in the first payment?

4. What will the MBS sell for in each of the following yield-survival scenarios? Years Survived Yield

to the left = years survived; to the right = yield

1; 6%

3; 7%

8; 9%