QUESTION 19

A mortgage pool is formed with mortgages with the following characteristics and assumptions:

Each mortgage has a balance of $63278

There are 80 mortgages in pool and all enter it at origination

Each mortgage has a 6% interest rate and are 10 year FRM with annual payments

Servicing and guarantee fee rate (total when adding both rates): 0.2%

No prepayment

What is the servicing and guarantee fee payment in year 1? Write your answers into rounded cents. For example, if you get 1,421,333.321544, write in 1421333.32