A mortgage pool is worth $10 million. Each mortgage has interest rate of 6%, term of 30
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Question:
A mortgage pool is worth $10 million. Each mortgage has interest rate of 6%, term of 30 years and monthly payments based on full amortization. Mortgage servicing fee is an annual 1.2% of the mortgage balance charged on monthly basis as a percentage of the mortgage balance at the beginning of the month. What is the value marked by X?
Month | Beginning | Required |
|
| Expected | Servicing | Ending |
1 | 10,000,000 | 59,955 | 50,000 |
| 15,000 |
|
|
2 |
|
| 49,875 |
| 30,000 | X | 9,935,055 |
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