Question
Alex borrows $160000 to buy a house. The adjustable rate mortgage carries a 6% annual percentage rate for the first 5 years. After that the
Alex borrows $160000 to buy a house. The adjustable rate mortgage carries a 6% annual percentage rate for the first 5 years. After that the rate will be adjusted downward to 5% annually to reflect market conditions. The loan term is 30 years an payments are made monthly. Please use this information to answer question 1, 2 & 3.
1. What is Alex's initial mortgage payment?
2. What is the remaining balance on the mortgage after five years?
3. What is the monthly payment Alex has to pay when the interest rate resets to 5%?
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Fundamentals Of Financial Management
Authors: James C Van Horne
3rd Edition
0133393410, 978-0133393415
