A 7/1 hybrid Adjustable Rate Mortgage is initially made for $140,000 at five percent with a 30-year maturity. Assume that fixed payments are to be made monthly for seven years and that the loan is fully amortizing. Then, starting in year eight the loan become an ARM, and during year eight the interest rate resets (resets are assumed to be annual) to six percent. What will be the monthly payments for year eight? (Only place the numeric value in the box as Canvas will not read symbols). 16 years ago, a homeowner obtained a fully amortizing loan $120,000 at eight percent interest for 30 years. Mortgage rates have dropped, so that a fully amortizing 14-year loan can be obtained today at six percent interest. There is a two-percent prepayment penalty on the mortgage balance of the original loan. In addition, the new loan will charge 3 points, and other closing costs on the new loan will add an additional $125.00. All payments and compounding are monthly. What is the numeric value of the effective annual interest rate (a number is required here). (Only place the numeric value in the box as Canvas will not read symbols)

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