Question
An ARM has a 5/2 cap (i.e., the rate cannot increase more than 2 percent per year and more than 5 percent over the life
An ARM has a 5/2 cap (i.e., the rate cannot increase more than 2 percent per year and more than 5 percent over the life of the mortgage). What will the mortgage rate be after three years if the initial rate is 6%, and interest rates increase by 2% in each of the first three years of the contract?
- A. 8%
- B. 9%
- C. 10%
- D. 11%
- E. 12%
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Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert Hughes, Melissa Hart
14th Edition
1264101597, 9781264101597
