The table shows the specifications of an adjustable ratemortgage? (ARM). Assume no caps apply. Find? a) the initialmonthly? payment; b) the monthly payment for the second?adjustment; and? c) the change in monthly payment at the firstadjustment. ?*The principal balance at the time of the first rateadjustment.
Beginning Balance ?$75000
Term 20 years
Initial index rate 5.4?%
Margin 2.6 ?%
Adjustment period 1 year
Adjusted index rate 6.9?%
?*Adjusted balance $73,414.75
What is the initial monthly? payment?
?(Round to the nearest? cent.)
What is the monthly payment for the second adjustment?period?
?(Round to the nearest? cent.)
How much is the increase in monthly? payments?
