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You wish to purchase a property worth $50,000 with a $10,000 down payment. You take out a 2/28 hybrid ARM with one-month LIBOR as the
You wish to purchase a property worth $50,000 with a $10,000 down payment. You take out a 2/28 hybrid ARM with one-month LIBOR as the reference rate. There is a two- year annual teaser rate of 2% and beginning in the third year the rate resets each year. The margin is 3.5% annually. Assume the loan is fully amortizing and: Find the monthly payments during the first two years. Find the monthly payments during the third year assuming 1-month LIBOR is 0.5% annually at the beginning of year three.
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