A basic ARM is made for $217,000 at an initial interest rate of 6 percent...
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Finance
A basic ARM is made for $ at an initial interest rate of percent for years with an annual reset date. The borrower believes that the interest rate at the beginning of year BOY will increase to percent.
Required:
a Assuming that a fully amortizing loan is made, what will the monthly payments be during year
b Based on a what will the loan balance be at the end of year EOY
c Given that the interest rate is expected to be percent at the beginning of year what will the monthly payments be during year
d What will be the loan balance at the EOY
e What would be the monthly payments in year if they are to be interest only?
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