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Assume we have a $500,000 mortgage at 3.5% original interest rate, with a 30 year term and monthly payments. The interest rate can be adjusted
Assume we have a $500,000 mortgage at 3.5% original interest rate, with a 30 year term and monthly payments. The interest rate can be adjusted at the end of each year, and we assume the rate increases 0.5% after the first year and another 0.25% after the second year. What is the effective yield of the mortgage if the loan is paid off at the end of the third year?
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