Imagine a mortgage pool that consists of 100 $1,300 mortgages. (No, this is not 1910. It is just that $130,000 worth of mortgages is an easier number to work with than $130,000,000). The mortgages pay an average of 7.20%, compounded monthly. Imagine that Collateralized Mortgage Obligations (CMOs) consisting of four tranches are issued on this mortgage pool. Assume initially that the principal owed for each tranche is $32,500. The first obligation is to pay the interest on tranches A, B, and C. tranche A will receive an interest rate of 6.54%, tranche B will receive an interest rate of 6.90%, and tranche C will receive an interest rate of 7.02%. A forth tranche Z will earn accrued interest of 7.86%, but will receive none of this interest until the principal for all the other tranches are paid off in full.

If the total payments for a month exceeds the total accrued interest owed to tranches A, B, and C, then the principal on tranche A will be paid down. Only if the principal owed to tranche A is completely paid off, will any extra payments for the month be used to pay off principal owed to tranche B. Only if the principal owed to tranches A and B are completely paid off, will any extra payments for the money be used to pay off principal owed to tranche C. Finally, only if the principal owed to tranches A, B, and C are completely paid off, will tranche Z receiving anything.

The payments for the mortgage pool are as shown below for the first six months:

Month 1: $ 11,700 Month 2: $ 14,300 Month 3: $ 22,100 Month 4: $ 27,300 Month 5: $ 32,500 Month 6: $ 11,700

Please determine the total monthly payments for each tranche