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You have an ARM loan with $200,000 with 30 years with payment cap yeat over at 5%. The teaser rate is 2.5%, monthly payment. Assume

You have an ARM loan with $200,000 with 30 years with payment cap yeat over at 5%. The teaser rate is 2.5%, monthly payment. Assume that the mortgage rate afjust to 5% in year 2.

1. what is the monthly payment for year 1?

2. what is the monthly payment for year 2?

3. assume that negatuve amortization is allowed, what is the ending balance at year 2?

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