Suppose that you are considering taking out an adjustable-rate mortgage with the following terms:

amount borrowed: $225,000

index rate: prime rate (current value is 3.5%)

margin: 200 basis points.

periodic cap: 1.5 percentage points

lifetime cap: 5 percentage points

amortization: 25 years

a. what will the initial monthly payment be for this loan?

b. if the loan’s interest rate adjusts every year and the prime rate falls to 2.75% by the end of the first year, what will your payment be in the second year of the loan?

c. what is the highest interest rate that the lender could charge over the life of the loan?

Answer

The answer and procedures of the exercise are attached in a microsoft excel document.  

Explanation  

Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.  

the first successful, urban blues recording, selling more than 75,000 copies, was made in year 1920.

mamie smith recorded the first commercially successful example of the urban blues,   with the recording of “crazy blues”."crazy blues" was recorded on august 10, 1920, in new york city. within a month of the release of “crazy blues” it had sold 75,000 copies.

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