You have taken out a $225,000, 3/1 ARM. The initial rate of 5.8% (annual) is locked in for 3 years and is expected to increase to 6.5% at the end of the lock period.

You have taken out a $225,000, 3/1 ARM. The initial rate of 5.8% (annual) is locked in for 3 years and is expected to increase to 6.5% at the end of the lock period. Calculate the initial payment on the loan. (Note: the term on this 3/1 ARM is 30 years)

A. $1,320.19

B. $1,422.15

C. $1,874.45

D. $1959.99

Expert Solution

ANSWER IS : A : 1320.19

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jeff jeffy answered 2 years ago

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