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Five years ago Lilian took out a 30 year 5/1 Hybrid ARM loan with monthly payments....

Five years ago Lilian took out a 30 year 5/1 Hybrid ARM loan with monthly payments. The initial rate on this loan is 2% and it resets to LIBOR plus a margin of 150bps. Suppose the remaining balance after five years of payments is $210,107 and the LIBOR rate at the first reset if 4%. What will be Lilian's new monthly payment during 6th year of the loan? Express your answer as a number rounded to the nearest cent (e.g. if you find that the payment is $600.0697, then write 600.07).

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Answer #1

Interest rate = LIBOR Rate + 150 BPS = 5.50%

Monthly payment = $1290.24

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