Assume that a lender offers a 30 -year, $154,000 adjustable rate mortgage (ARM) with the following terms: Initial interest rate =7.5 percent Index = one-year Treasuries Payments reset each year Margin =2 percent Interest rate cap=1 percent annually; 3 percent lifetime Discount points =2 percent Fully amortizing; however, Qegative amortization allowed if interest rate caps reached Based on estimated forward rates, the index to which the ARM is tied is forecasted as follows: Beginning of year (BO)2=7 percent; (BON)3=8.5 percent; (BOn 4=9.5 percent: (BOY) 5=11 percent. Required: a. Compute the payments and loan balances for the ARM for the five-year period. b. Compute the yield for the ARM for the five-yoar period. Complete this question by entering your answers in the tabs below. Compute the payments and loan balances for the Apm for the five-year period. Note: Do not round intermediate calculations. Round "Paymenta" In 2 decimal places and "Loan Batance" to the ricarest doliar Anount. An investor obtained a fully amortizing mortgage five years ago for $96,300 at 11 percent for 30 years. Mortgage rates have dropped, so that a fully amortizing 25 -year loan can be obtained at 10 percent. There is no prepayment penalty on the mortgage balance of the original loan, but 3 points will be charged on the new loan and other closing costs will be $2,000. All payments are monthly. Assume that the investor borrows only an amount equal to the outstanding balance of the loan. Required: a. Should the borrower refinance if he plans to own the property for the remaining loan term? b. Should the borrower refinance if he planned to own the property for only five more years? Complete this question by entering your answers in the tabs below. Should the borrower refinance if he plans to own the property for the remaining loan term? Assume that a lender offers a 30 -year, $154,000 adjustable rate mortgage (ARM) with the following terms: Initial interest rate =7.5 percent Index = one-year Treasuries Payments reset each year Margin =2 percent Interest rate cap=1 percent annually; 3 percent lifetime Discount points =2 percent Fully amortizing; however, Qegative amortization allowed if interest rate caps reached Based on estimated forward rates, the index to which the ARM is tied is forecasted as follows: Beginning of year (BO)2=7 percent; (BON)3=8.5 percent; (BOn 4=9.5 percent: (BOY) 5=11 percent. Required: a. Compute the payments and loan balances for the ARM for the five-year period. b. Compute the yield for the ARM for the five-yoar period. Complete this question by entering your answers in the tabs below. Compute the payments and loan balances for the Apm for the five-year period. Note: Do not round intermediate calculations. Round "Paymenta" In 2 decimal places and "Loan Batance" to the ricarest doliar Anount. An investor obtained a fully amortizing mortgage five years ago for $96,300 at 11 percent for 30 years. Mortgage rates have dropped, so that a fully amortizing 25 -year loan can be obtained at 10 percent. There is no prepayment penalty on the mortgage balance of the original loan, but 3 points will be charged on the new loan and other closing costs will be $2,000. All payments are monthly. Assume that the investor borrows only an amount equal to the outstanding balance of the loan. Required: a. Should the borrower refinance if he plans to own the property for the remaining loan term? b. Should the borrower refinance if he planned to own the property for only five more years? Complete this question by entering your answers in the tabs below. Should the borrower refinance if he plans to own the property for the remaining loan term