Question
An ARM is made for $200,000 for 30 years with the following terms: Initial interest rate = 3% Index = 1-year Treasuries Payments reset each
| An ARM is made for $200,000 for 30 years with the following terms: | ||||||
| Initial interest rate = 3% | ||||||
| Index = 1-year Treasuries | ||||||
| Payments reset each year | ||||||
| Margin = 2 percent | ||||||
| Fully amortizing | ||||||
| Estimated forward rates: | ||||||
| BOY 2 | 4.50% | |||||
| BOY 3 | 5.25% | |||||
| BOY 4 | 6% | |||||
| BOY 5 | 6.50% | |||||
| Compute payments and balances for each of the years 1-5. |
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Real Estate Finance and Investments
Authors: William Brueggeman, Jeffrey Fisher
14th edition
73377333, 73377339, 978-0073377339
