PLEASE ANSWER BOTH QUESTIONS TY

1. Tim wants to buy an apartment that costs $1,750,000 with an 85% LTV mortgage. Tim got a 30 year, 3/1 ARM with an initial teaser rate of 5.5%. The reset margin on the loan is 300 basis points above 1 year CMT. There are no caps. Tim anticipates the index to be 8.50% at the time of the 1^st reset.

What is Tims monthly mortgage payment going to be during the 1^st 3 years?

2. Tim wants to buy an apartment that costs $1,750,000 with an 85% LTV mortgage. Tim got a 30 year, 3/1 ARM with an initial teaser rate of 5.5%. The reset margin on the loan is 300 basis points above 1 year CMT. There are no caps. Tim anticipates the index to be 8.50% at the time of the 1^st reset.

If the index resets to 8.50% as Tim forecasts, what will his new mortgage payment be in year 4