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A borrower takes out a 30-year adjustable rate mortgage loan for $250,000 with monthly payments. The first two years of the loan have a rate

A borrower takes out a 30-year adjustable rate mortgage loan for $250,000 with monthly payments. The first two years of the loan have a rate of 5%, after that, the rate can reset with a 2% annual rate cap. On the reset date, the composite rate is 6%. What would the Year 3 monthly payment be? [ARM Chapter 5]

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