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Currently, fixed mortgage rates are 8% for a 30-year mortgage. You checked and found a 3/1 adjustable-rate mortgage with a 30 year amortization of 6.0%.

Currently, fixed mortgage rates are 8% for a 30-year mortgage. You checked and found a 3/1 adjustable-rate mortgage with a 30 year amortization of 6.0%. The terms of the adjustable-rate mortgage are:

Index Rate: 5%

Margin: 2%

Annual cap 1%

After three years, the index rate is now 3%, what is your new mortgage rate?

A. 5%

B. 6%

C.7%

D. 8%

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