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Can you please explain #6 for me? What is the answer to the question and How do you add the basis points? you add them
Can you please explain #6 for me? What is the answer to the question and How do you add the basis points? you add them to the reset? or to the initial rate? Please explain with details a) Adjust of the loan and remain there for the remaining term of the to the life cap loan b) Adjust to the initial fully indexed rate and stay there for the remaining term of loan the c) Not adjust: the projected rate on the loan is the same as its initial rate d) Can only be determined if there is a rate forecast included in this question 6. Ann gets a 30 year 1/1 Fully Amortizing ARM for $1,000,000, with monthly payments and monthly compoundin The initial rate is 4%. In the future, the rate reset to basis points above the There are no rate caps or Suppose at the first reset, the LIBOR was 1%. What is the monthly mortgage payment for the 3177 second year? $4,497.68 B) $4,774.15 C) $34,383.85 D) $39,295.63 7. Ann gets a 30 year 1/1 Fully Amortizing ARM for $1,000,000, with monthly payments and monthly compounding. The initial rate is 3%. In the future, the rate will reset to 250 basis points above the LIBOR. There are no rate caps or floors. Suppose at origination the LIBOR was 3%. What is the annualized true APR for the loan? A) 2.50% B) 3.00%
Can you please explain #6 for me? What is the answer to the question and How do you add the basis points? you add them to the reset? or to the initial rate? Please explain with details
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