Question

Five years ago you took out a 5/1 adjustable rate mortgage and the five-year fixed rate period has just expired. The loan was originally for $291,000 with 360 payments at 4.1% APR, compounded monthly.

a. Now that you have made 60 payments, what is the remaining balance on the loan?

b. If the interest rate increases by 1.2%, to 5.3% APR, compounded monthly, what will your new payments be?

Answer #1

a)

b)

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