A CMO is being issued with 3 tranches. The A tranche will consist of $100MM of principal and have a coupon of 7%. The B tranche will consist of $50MM of principal and have a coupon of 7%. The Z tranche (accrual tranche) will consist of $25MM of principal and have a coupon of 7%. The mortgages backing the security issued are FRM at 7.0% with 30 year (360 month) maturities and monthly payments. Priority payments will be made to the A tranche and will include the promised coupon. Interest will be accrued to the Z tranche until A is completely repaid. The B class will receive interest payments only until the A class is repaid. The A class will then receive all remaining CFs from the pool that year. After A is repaid, B will receive priority principal payments. The Z class will accrue interest at 7% until both A and B are repaid. It will receive current interest and principal payments at that time. Assume there is no prepayment or servicing fees.

1) Given the information presented above, what is the total cash flow to investors in Class A in year 3?

2) Given the information presented above, what is the total cash flow to investors in Class B in year 3?

3) Given the information presented above, what is the total cash flow to investors in Class Z in year 1?

4) What is the balance of the Class A tranche at the end of year 7?