Answer Questions Part A To Part B $600,000 10-year 3/1 ARM loan that is fully-amortizing with monthly payments. The loan terms include a teaser rate of 2.0%. After the initial teaser rate period, the interest rate resets annually to the index rate plus a margin of 1.50%. The loan terms also include an annual interest rate cap of 2.0% and a lifetime interest rate cap of 6.0% over the initial teaser rate. Expectations for the beginning-of-year values for the appropriate index are as follows: Year Index 1 4.00% 2 4.50% 3 4 5 6 5.00% 5.00% 5.75% 6.25% 6.75% 4.00% 4.50% 5.25% 7 8 9 10 Part A: Assuming up front points of 3.0%, what is the loans EIR if it is prepaid at the end of year 6 (assume no prepayment penalties)? Part B: Calculate Following in the Template Below In Excel AND PLEASE INCLUDED FORMULA YOU ENTERED INTO TEMPLATE IN EXCEL: beg balance, payment, interest, principal, end balance, EIR, Cash Flows Following Is Template In Excel A B D E F G H 1 K 1 2 3 EIR 4 Loan Amount Balloon Payment Prepay Penalty Term (Years) Rate Points 5 Cash flows 6 Beg balance Payment Interest Principal End balance 0 1 2. 3 4 5 6 7 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 8 9 10 11 12 13 14 15 16 17 18 24 25 26 19 27 20 21 28 29 22 23 24 30 31 32 33 34 25 26 27