Assume the price of a house is $ 686,000

A borrower wants to evaluate the loans listed below and anticipates owning the new home for 8 years. Calculate the payments, loan balance at the end of year 8 and yield for each mortgage for the 8 year period using spread sheets.

Based on estimated forward rates, the index to which the ARM is tied is forecast as follows:

EOY six months: 5.5% EOY 1: 4.10%

EOY 18months: 5.75% EOY 2: 6.15%

EOY 30months: 8.5% EOY 3: 9.25%

EOY 42months: 9.5% EOY 4: 10.2%

EOY 54months: 11% EOY 5: 13.0%

EOY 66months: 10.0% EOY 6: 8.0%

EOY 78months: 7.5% EOY7: 6.0%

4- The five different mortgages are listed below:

Mortgage A: FRM @6.30 % for 30 years with 20% down payment, 1.25 point.

Mortgage B: ARM @ 5.5% for 30 years with 20% down payment, 1.5 point, adjustable annually based on the index of one-year Treasuries given plus a margin of 1.50%. This loan has an annual interest rate cap of 1% and 4% interest cap over the life of the loan and no negative amortization.

Mortgage C: ARM @ 4.0% for 30 year with 20% down payment, .75 point, adjustable annually based on the index of one-year Treasuries given plus a margin of 1.25%. This loan has a payment cap of 8% and allows negative amortization.Mortgage D: ARM @ 3.25% for 30 years with 20% down payment, 0.5 points, adjustable annually based on the index of one-year Treasuries plus a margin of 1.0%.

Please I want to compare my answer, especially the yield for each year

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