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If the initial contract rate on an ARM is 6%, the second year contract rate is 9%, the margin is 2%, the life of the
If the initial contract rate on an ARM is 6%, the second year contract rate is 9%, the margin is 2%, the life of the loan cap is 5%, and the annual cap is 3%, what is the contract rate for year three if the index is 9%?
Could someone walk me through how to solve this problem. I am not just looiking for the answer I am trying to understand how to solve it.
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