Figure $1$: Interest rate applied to new loans issued monthly. Source: SSB$.$

Table $1$: Yearly loan rates.

The table shows the interest rate fluctuations for $25$ months. Assume for a

moment that the loan in item $($c$)$ was granted on the $1$st of December $2021$ and

the first instalment is due on the $1$st of January $2022.$ Compute the amount

$B$ that is offered to the borrower on the $1$st of December $2021,$ hereby $B_0.$

Thereafter, when the new rate is published on the $1$st of January, the amount

$B_0$ is readjusted to a new amount $B_1$ according to the new interest rate. For

the first step we start with $r=1\mathrm{.}92\%$ then it is increased to $r=2\mathrm{.}06\%$ and so

on$.$ Compute the new amount $B_1$ and do the same for the coming months, $B_2,$

dots,$B_{24}.$ You can still asumme that $T=20$ years. This exercise is just about

updating the mortgage instalments according to the interest rate fluctuations.

Compute the final balance that the borrower has paid for these $25$ months

and the fixed constant rate that would make up to the same balance. This

rate, would be the threshold under which a fixed$-$rate mortgage would be more

profitable than an adjustable$-$rate mortgage.