A pass-through security issued by Royal Bank is backed by a pool of 5700 identical mortgages.The principal of each mortgage is $474,000. Each mortgage has a fixed annual interest rate of12% paid monthly and a maturity of 30 years.What is the amount of interest included in the second monthly payment?(Round your answer to the nearest integer, i.e. without decimals and please do notshow the $ sign in the answer e.g. if the answer is $15320.63, enter 15321).Answer:

Interest payments refer to the periodic cash outflow in the form of the expense of employing the…

Answered: A pass-through security issued by Royal…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You took out a $200,000 mortgage for 30 years. The contract rate is tied to the one-year U.S. treasury rate (index rate). The fixed risk premium for your mortgage is 9%. Your interest rate will be adjusted every year. For the first year, the index rate is 1.5%. What is the outstanding principal at the end of year 1? $95,758 $198,999 $197,769 $96,726
If a mortgage has monthly payments of $1,315, a life of 30 years, and a rate of 4.25 percent per year, what is the mortgage amount? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Mortgage amount
Calculate the monthly payments for each of the following $119,600 mortgage loans. Assume no prepayments. a. 30-year fixed at 7.25 percent b. 15-year fixed at 6.25 percent c. 20-year fixed at 6.75 percent Note: Round intermediate computations to at least five (5) decimal places. Click on the table icon to view the Monthly Installment Loan Payment Factor (MILPF) table: a. The monthly payment, PMT, on the 30-year loan is $ (Round to the nearest cent.)
(Related to Checkpoint 6.3) (Determining the outstanding balance of a loan) Five years ago you took out a $250,000, 25-year mortgage with an annual interest rate of 11 percent and monthly payments of $2,450.28. What is the outstanding balance on your current loan if you just make the 60th payment? CTT If you just make the 60th payment, the outstanding balance on your current loan is $ (Round to the nearest cent.)
A mortgage broker is offering a $279,000 30-year mortgage with a teaser rate. In the first two years of the mortgage, the borrower makes monthly payments on only a 4.5 percent APR interest rate. After the second year, the mortgage interest rate charged increases to 7.5 percent APR. What are the monthly payments in the first two years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Monthly payment What are the monthly payments after the second year? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Monthly payment > 2 D TRENE VAR TVUNG S 2006- E - E
A bank offers 35-year, $175,000 mortgages at 4.6 percent and charges a $3,600 refundable loan application fee. The current disclosure law requires that any fees that will be refunded if the applicant is rejected be included in calculating the APR What is the APR that they are required to disclose? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) APR Insecurity Bank and trust (Refundable) % %
Ironwood Bank is offering a 30-year mortgage with an APR of 6.10% based on monthly compounding. If you plan to borrow $161,000, what will be your monthly payment? (Note. Be careful not to round any intermediate steps less than six decimal places.) The loan payment is § (Round to the nearest cent.)
A mortgage broker is offering a $279,000 30-year mortgage with a teaser rate. In the first two years of the mortgage, the borrower makes monthly payments on only a 4.5 percent APR interest rate. After the second year, the mortgage interest rate charged increases to 7.5 percent APR. What are the monthly payments in the first two years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Monthly payment What are the monthly payments after the second year? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Monthly payment
If a mortgage has monthly payments of $1,288, a life of 20 years, and a rate of 4.70 percent per year, what is the mortgage amount? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Answer is complete but not entirely correct. 2,143.40 Mortgage amount
A mortgage broker is offering a 30-year $192,900 mortgage with a teaser rate. In the first two years of the mortgage, the borrower makes monthly payments on only a 4.9 percent APR interest rate. After the second year, the mortgage interest rate charged increases to 7.9 percent APR. What are the monthly payments in the first two years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Monthly payment What are the monthly payments after the second year? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Monthly payment
Given the following information of the mortgage pool that backs a MPT, what is the regular scheduled payment in month 1 of the security? Use WAC as the mortgage rate and WAM as the number of periods for your calculations. Round your final answer to two decimals. • 30 year FRM, fully amortizing, monthly payments • Loans seasoned for 3 months before entering pool • WAM: 357 • WAC: 4% • Servicer/Guarantee fee: 0.55% • Starting pool balance: 250,342,967 • Prepayment assumption: 75% PSA
The following assumptions are made for each Investigation: The original mortgage is $300,000 amortized over 25 years at 3.99% compounded semi- annually Unless otherwise indicated, assume monthly payments are made. Unless otherwise indicated, assume the interest rate remains constant during the amortization period. Your answers can be entered directly on this assignment, but please hand in all rough work as well. Investigation 1: Shortening the Payment Period Most lending institutions allow mortgage payments to be made monthly, bi-monthly (twice a month) or weekly. Most even allow "accelerated" weekly mortgage payments. With this option, the weekly payment is calculated as a monthly payment divided by 4. 1. (a) Complete this table for the mortgage defined above. The equivalent interest rate of interest for each compounding period has been calculated for you (as discussed in section 6.4 in your text). The Interest saved is the difference between the Total interest paid for monthly…

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