A 3/1 ARM is made for $150,000 at 7% with a 30 year maturity. Assuming that fixed payments are to be made monthly for three years and that the loan is fully amortizing, what wil…

Question

asked Feb 15, 2021 206k views

1 Answer

Plato · Answer 1 · 2021-02-21T02:59:56+0000

Answer:

Monthly paymenty for $ 997.954

Step-by-step explanation:

We have to calcualte for the PTM of the mortgage for the first three years at which the rate is fixed:

$PV / (1-(1+r)^(-time) )/(rate) = C\\$

PV $150,000

time 360 (30 years x 12 months)

rate 0.005833333 (7% annual / 12 months)

$150000 / (1-(1+0.005833)^(-360) )/(0.005833) = C\\$

C $ 997.954