Aimee and Ben are purchasing a condominium and are financing $610,000. The mortgage is a 20-year 3/1 ARM at 4.15% with a cap str

Question

lisabon 2012 [21]

2 years ago

13

Aimee and Ben are purchasing a condominium and are financing $610,000. The mortgage is a 20-year 3/1 ARM at 4.15% with a cap str

ucture of 1.5/10. What will their payments be for the first 3 years?

Mathematics

1 answer:

JulsSmile [24] · Answer 1 · 2022-02-25T23:44:13+03:00

For the first 3 years, the interest will not be changed because of the 3/1 ARM policy. The interest will stay at 4.15%. The monthly payments will be based on the 4.15% and 20 year period. The interest is then converted to effective monthly rate by dividing by 12 and payments will computed using the formula
A = Pi (i + 1)^n / [(1 + i)^n - 1]