If the bank can originate and securitize this amount of mortgages with the same terms four times over the next year (including the existing mortgages) and the bank earns a servicing fee each month equal to 3.5% of the monthly payments, what will be the bank's monthly fee income 12 months from now?

Question

Quizplus · Accepted Answer

Using the given information, the total amount of mortgages originated and securitized by the bank would be 4 times the existing amount, which is 4 x 923,576 = 3,694,304. Multiplying this amount by the servicing fee of 3.5% gives us a total monthly fee income of 3,694,304 x 0.035 = $129,301. Therefore, choice D is the correct answer.

If the Bank Can Originate and Securitize This Amount of Mortgages