The Underlying GNMA 15-Year Mortgage Pool Has a Principal Amount

Multiple Choice

The underlying GNMA 15-year mortgage pool has a principal amount of $50 million and an annual yield of 6 percent (paid monthly) .Assume that there are no prepayments. What is the first monthly payment on the Interest Only (IO) strip?

A) $3,000,000.
B) $421,928.
C) $250,000.
D) $299,775.
E) $171,928.