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Please show the excel for the problem, I have gotten all the way through but I am stuck on finding the, Yield for the 5-year
Please show the excel for the problem, I have gotten all the way through but I am stuck on finding the, "Yield for the 5-year period.".
7. An ARM is made for $150,000 for 30 years with the following terms: Initial interest rate = 7 percent Index = 1-year Treasuries Payments reset each year Margin = 2 percent Interest rate cap= None Payment cap = 5 percent increase in any year Discount points = 2 percent Fully amortizing; however, negative amortization allowed if payment cap reached Based on estimated forward rates, the index to which the ARM is tied is forecasted as follows: Beginning of year (BOY) 2 = 7 percent; (BOY) 3 = 8.5 percent; (BOY) 4 = 9.5 percent; (BOY) 5 = 11 percent Compute the payments, loan balances, and yield for the ARM for the five-year period. 7. An ARM is made for $150,000 for 30 years with the following terms: Initial interest rate = 7 percent Index = 1-year Treasuries Payments reset each year Margin = 2 percent Interest rate cap= None Payment cap = 5 percent increase in any year Discount points = 2 percent Fully amortizing; however, negative amortization allowed if payment cap reached Based on estimated forward rates, the index to which the ARM is tied is forecasted as follows: Beginning of year (BOY) 2 = 7 percent; (BOY) 3 = 8.5 percent; (BOY) 4 = 9.5 percent; (BOY) 5 = 11 percent Compute the payments, loan balances, and yield for the ARM for the five-year periodStep by Step Solution
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