You have bought a home that has a $750,000 mortgage and you have decided to use the variable closed rate of 2.65 percent that your bank has available and your payments will increase/decrease according to the new rate. The rate can adjust on a quarterly basis based on market changes. What is the payment if you amortize the mortgage over 25 years? Assume 6 months later the variable rate goes up to 3.15 percent as inflation has picked up. What is your monthly payment now? What is the impact and risk associated with this market and variable rate interest rates?

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(8 pts ) What is the payment if you amortize the mortgage over 25 years?

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(7 pts) Assume 6 months later the variable rate goes up to 3.15 percent as inflation has picked up. What is your monthly payment now?