What is the starting pool balance for tranche a investors

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Reference no: EM132906155

A CMO is being issued with 2 tranches:- Tranche A has $20 million in principal and a 6.2% coupon.

- Tranche B has $13 million in principal and a 6.2% coupon.

The mortgages backing the security issued are FRM at a mortgage rate of 6.2% with 10 year maturities and annual payments. There is no guarantee/servicer fee. Prepayment is assumed to be 5% CPR. Remember in this case, the sum of the two tranches' principal is the total amount of principal owed by the mortgage pool.

What is the starting pool balance for Tranche A investors in year 2? (Note: same as the ending pool balance for Tranche A investors in year 1) Round your answer to two decimal points (e.g. if your answer is $45,666.6666, write 45666.67).

Reference no: EM132906155

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