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please help A borrower has been analyzing different adjustable rate mortgage (ARM) alternatives for the purchase of a property. The borrower anticipates owning the property
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A borrower has been analyzing different adjustable rate mortgage (ARM) alternatives for the purchase of a property. The borrower anticipates owning the property for five years. The lender first offers a $156,000, 30-year fully amortizing ARM with the following terms: Initial interest rate 6 percent Index = 1-year Treasures Payments reset each year Margin = 2 percent Interest rate cap = None Payment cap = None Negative amortization = Not allowed Discount points=2 percent Based on estimated forward rates, the index to which the ARM is tied is forecasted as follows: Beginning of year (BOY) 2.9 percent (BOY 3 = 10.5 percent: (809) 4 - 11.5 percent (BOY 5 - 13 percent. Required: a Compute the payments and loan balances for the unrestricted ARM for the five-year period, b. Compute the yield for the unrestricted ARM for the five-year period Complete this question by entering your answers in the tabs below. Reg A Req B Compute the payments and loan balances for the unrestricted ARM for the five-year period. (Do not round intermediate calculations. Round "Payments" to 2 decimal places and "Loan Balance" to the nearest dollar amount.) Payments Loan Balance Year 1 Year 2 Year 3 Step by Step Solution
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