Assume that you have borrowed $150,000 from the bank at an annual interest rate of 6.25% for 20 years. How many months does it take to pay 75% of the principal: (a) 203; (b) 240; (c) 120; (d) 172
Assume you hold the mortgage from the previous question^^^^ as a security. Assume a conditional prepayment risk of 10%.
What is the single monthly mortality rate: (a) 0.091; (b) 0.0043; (c) 0.10; (d) 0.0087;
What is the expected prepayment in the first month: (a) 1,308; (b) 2,738; (c) 1,879; (d) 3,245