Calculate the yearly payments received by the FI

Assignment Help Corporate Finance

Reference no: EM132210906

Question -

(a) Assume the discount rate is 10%. An FI originates a pool of real estate loans worth $2 million with maturities of 5 years and paying interest rates of 10% APR per year. Calculate the yearly payments received by the FI from the mortgage pool at year end cover the five-year period. If the payments are separated into interest only (IO) and principal only (PO) payments, what will be their present values?

(b) Assume the discount rate is 8%. An FI originates a pool of real estate loans worth $2 million with maturities of 5 years and paying interest rates of 10% per year. Prepayments of 5% occur at the end of year 3, and that the payment of the remaining principal occurs at the end of year 4. What is the present value of IO?

Reference no: EM132210906

Questions Cloud

Bring about desired outcomes : Describe how conflict in some cases may be necessary to bring about desired outcomes.

Implementation of e-commerce on local government : What is the impact and implementation of E-commerce on local government?

What are the primary drivers of information systems design : Key performance indicators: What are the primary drivers of information systems design?

Effect of family control on corporate performance : The Effect of Family Control on Corporate Performance. The objective of this work is to analyze whether family controlled companies are more profitable than non

Calculate the yearly payments received by the FI : An FI originates a pool of real estate loans worth $2 million with maturities of 5 years. Calculate the yearly payments received by the FI

What can an organization do to help its people : What can an organization do to help its people be prepared for change?

Think about the three management levels : Think about the three management levels. Are they clearly defined in this company?

Why is it important for an organization to capture : Help me write these discussions. questions. This is for Management Information need to be at least two paragphahs

Identify opportunities for alliances with other agencies : As you begin to develop the technical elements, consider the goals related to internationalization and alliances.

User Account

All Pages