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An ARM is made for $ 1 6 5 , 0 0 0 for 3 0 years with the following terms: Initial interest rate =
An ARM is made for $ for years with the following terms:
Initial interest rate percent
Index year Treasuries
Payments reset each year
Margin percent
Interest rate cap None
Payment cap percent increase in any year
Discount points percent
Fully amortizing; however, negative amortization allowed if payment
cap reached
Based on estimated forward rates, the index to which the ARM is tied is
forecasted as follows: Beginning of year BOY percent; BOY
percent; BOY percent; BOY percent.
Required:
a Compute the payments and loan balances for the ARM for the
fiveyear period.
b Compute the yield for the ARM for the fiveyear period.
Complete this question by entering your answers in the tabs belov
Required A
Compute the payments and loan balances for the ARM for the fiveyear peI
Note: Do not round intermediate calculations. Round your final answers to
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