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A mortgage broker is offering a 20-year $179,900 mortgage with a teaser rate. In the first...

A mortgage broker is offering a 20-year $179,900 mortgage with a teaser rate. In the first two years of the mortgage, the borrower makes monthly payments on only a 3.6 percent APR interest rate. After the second year, the mortgage interest rate charged increases to 6.6 percent APR.

What are the mothly payments in the first two years?

What are the monthly payments after the second year? Please do not round intermediate calculations and round your final answer to 2 decimal places.
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Answer #1
Amount of loan borrowed 179900
Annual rate = 3.60%
Monthly rate =3.6 /12 = 0.30%
Divide: Annuity PVF at 0.30% fr 240 periods 170.9076
Monthly payment 1052.62
Loan outstanding after two months:
Monthly payment 1052.62
Multiply: Annuity for 216 periods 158.8005
Outstanding balance 167156.6
Annual rate = 6.60%
Monthly rate = 6.60 / 12 = 0.55%
Divide: Annuity PVF at 0.55% for 216 periods 126.2138
Monthly payment 1324.392
Answer is $ 1324.39
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