Question
4) Assume a 2/1 ARM without cap. Term=30 years. Initial loan balance=$200,000. The teaser rate=7%, margin=2%. What is the mortgage balance at the end of
4) Assume a 2/1 ARM without cap. Term=30 years. Initial loan balance=$200,000. The teaser rate=7%, margin=2%. What is the mortgage balance at the end of Year 2?
| Year | LIBOR | Mortgage rate | Beginning balance | mortgage payment | Interest payment | Principal payment | Ending balance |
| 1 | 8.60% |
|
|
|
|
|
|
| 2 | 9.50% |
|
|
|
|
| |
| 3 | 10% |
|
|
|
Select one:
a. $199,732.43
b. $195,790.03
c. $201,187.56
d. $175,098.34
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
9781285586618
