You borrowed $270,000 for 30 years to buy a house with a graduated payment mortgage with...

You borrowed $270,000 for 30 years to buy a house with a graduated payment mortgage with an interest rate of 5.25% per year. The first year’s monthly payments are $1,123.74, and the payments increase 7.0% per year for five years. What is the monthly payment at the beginning of the third year? Question 14 options: 1) $1,376.63 2) $1,472.99 3) $1,576.10 4) $1,286.57 5) $1,328.95

Expert Solution

Monthly payment at the beginning of the third year = First year's monthly payment * (1 + rate)^n

= $1,123.74 * (1 + 7%)^2

= $1,286.57

Monthly payment at the beginning of the third year = $1,286.57

jeff jeffy answered 2 years ago

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