Overseas bank is pooling 50 similar and fully amortized mortgages into a pass-through security. The face value of each mortgage is 100,000 paying 180 monthly interest and principal payments at a fixed rate of 9 percent per annum.

What is the market (present) value of the mortgage pass-through to the investor if the interest rates on this risk category of securities decrease to 7 percent (Note that investors receive payments net of the 50 basis points servicing fees)?

A. $4,892,200B. $5,000,000C. $5,152,189D. $5,477,910E. $5,675,005 the corre answer is D D. $5,477,910