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A homeowner finances his house using an Adjustable Rate Mortgage with a starting rate of 3.0% on a 100,000 loan. The term length is 30

  1. A homeowner finances his house using an Adjustable Rate Mortgage with a starting rate of 3.0% on a 100,000 loan. The term length is 30 years with a 1-year interval period. If the composite rate changes to 9%, what will be the new payment amount after 1-year if there is a payment cap of 5%? What will be the new loan balance at the end of year 2 (20 points)?

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