Question

Calculate the CPR and SMM using the 350% PSA schedule for months t=1 through t=30. Display your results in a table below with four columns labeled, from left to right, t, PSA, CPR, SMM.

Answer 1

The formula to calculate CPR and SMM are -

CPR = .06(n/30)*PSA

SMM = 1-(1-CPR) ^1/12

Let's calculate these in excel -

t	PSA	CPR	SMM
1	350%	0.70%	0.06%
2	350%	1.40%	0.12%
3	350%	2.10%	0.18%
4	350%	2.80%	0.24%
5	350%	3.50%	0.30%
6	350%	4.20%	0.36%
7	350%	4.90%	0.42%
8	350%	5.60%	0.48%
9	350%	6.30%	0.54%
10	350%	7.00%	0.60%
11	350%	7.70%	0.67%
12	350%	8.40%	0.73%
13	350%	9.10%	0.79%
14	350%	9.80%	0.86%
15	350%	10.50%	0.92%
16	350%	11.20%	0.98%
17	350%	11.90%	1.05%
18	350%	12.60%	1.12%
19	350%	13.30%	1.18%
20	350%	14.00%	1.25%
21	350%	14.70%	1.32%
22	350%	15.40%	1.38%
23	350%	16.10%	1.45%
24	350%	16.80%	1.52%
25	350%	17.50%	1.59%
26	350%	18.20%	1.66%
27	350%	18.90%	1.73%
28	350%	19.60%	1.80%
29	350%	20.30%	1.87%
30	350%	21.00%	1.95%