The Bhatts purchased a new home for

$245 comma 000245,000

with a down payment of

$43 comma 00043,000.

They obtained a

2525-year

adjustable rate mortgage with the following terms. The interest rate is based on the one-year Treasury bill rate, which is currently at

2.52.5%,

and the add-on rate, which is

3.53.5%.

The initial rate period is 5 years, and thereafter the interest rate is adjusted once a year and a new monthly mortgage payment is calculated.

a) Determine the Bhatts' initial ARM rate.

b) Determine the Bhatts' initial monthly payment for principal and interest.

c) If, after the 5-year initial rate period, the rate of the one-year Treasury bill rises to

3.03.0%,

determine the Bhatts' new ARM rate.

aestion Help 10.5.25 25%, and the addon rato. which is 3.5%. The real rate perod5years, and breater t. rtemet rale is adusted once a) Determine the Bhalts' initial ARM rate b] Determine the Bhatts initial monthily payment far principal and interest c)it,ah" the 5-year nHal rate perod, te rale of one year Treasury bil roes to 30%, dnem"netho hm. new ARM yer and new many morege prere-aaet