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QUESTION 1 LOAN 1 LOAN 2 LOAN 3 LOAN 4 Initial Interest Rate ? ? ? ? Loan Maturity (years) 20 20 20 20 %

QUESTION 1

  1. LOAN 1 LOAN 2 LOAN 3 LOAN 4
    Initial Interest Rate ? ? ? ?
    Loan Maturity (years) 20 20 20 20
    % Margin Above Index 3% --- 3% 3%
    Adjustment Interval 1 yr. --- 1 yr. 1 yr.
    Points 1% 1% 1% 1%
    Interest Rate Cap NONE ---- 1%/yr. 3%/yr.
    Which loan in the above table should have the lowest initial interest rate?

    Loan 1

    Loan 2

    Loan 3

    Loan 4

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