[This question is NOT related to the CFA exam]
Anybody knows how to value a mortgage when interest payments and principal repayments are different in frequency? For example capital repayment is monthly and interest payment is quarterly, I’m given the outstanding amount and need to figure out the payment amount each month / quarter.
Current value: 317,267
Maturity: 38 months from now
Coupon: 10%. paid quarterly
Principal: equal payment monthly
How do I calculate principal/interest payment each month? Also, what interest rate do I use to discount the CFs? Is it LIBOR? And if so what maturity?