Overseas Bank Is Pooling 50 Similar and Fully Amortized Mortgages

question 55

Multiple Choice

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. If the entire mortgage pool is repaid after the second month, what is the second month's interest and principal payments?

• A)$37,441 interest and $13,275 principal.
• B)$13,275 principal and $37,441 interest.
• C)$13,312 interest and $4,986,786 principal.
• D)$4,986,786 interest and $37401 interest.
• E)$37,401 interest and $4,986,786 principal.

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Definitions:

Nitrate

A polyatomic ion with the chemical formula NO3- or a compound containing this ion, commonly found in fertilizers, explosives, and natural water sources.

Ecosystem Management

A conservation focus that emphasizes restoring and maintaining ecosystem quality rather than the conservation of individual species.

Ecosystem Experiments

Controlled studies designed to investigate the relationships among organisms and their environment within an ecosystem.

Heterocysts

Specialized nitrogen-fixing cells found in some filamentous cyanobacteria, providing an anaerobic environment necessary for the fixation of atmospheric nitrogen.