Question
The table shows the specifications of an adjustable rate mortgage (ARM). Assume no caps apply. Find a) the initial monthly payment; b) the monthly payment
The table shows the specifications of an adjustable rate mortgage (ARM). Assume no caps apply. Find a) the initial monthly payment; b) the monthly payment for the second adjustment; and c) the change in monthly payment at the first adjustment.
*The principal balance at the time of the first rate adjustment.
| Beginning Balance | $80,000 |
|---|---|
| Term | 20 years |
| Initial index rate | 6.6% |
| Margin | 2.4% |
| Adjustment period | 1 year |
| Adjusted index rate | 8.1% |
| *Adjusted balance | $78,501.84 |
What is the initial monthly payment?
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Accounting For Decision Making And Control
Authors: Jerold Zimmerman
10th International Edition
1260565475, 9781260565478
