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Calculate the monthly mortgage payment

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Use the annuity formula to calculate the monthly mortgage payment for a 30 year, $500,000 home loan with a fixed annual rate of 5%. How much of your first payment is principle?

The first traunche of a just-issued, $100million (total principle value) CMO has a principle of $1million. The underlying mortgages in the pool all have an interest rate of 5% and the average mortgage has a principle of $500,000. Using the principle amount you just calculated, and assuming that value won't change substantially for the first couple of payments, how long will it be before this first traunche is retired assuming there are no pre-payment?

Reference no: EM133112917

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