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il63 [147K]
3 years ago
10

What is a lifetime cap?

Mathematics
1 answer:
Nostrana [21]3 years ago
5 0
A lifetime cap is the maximum interest rate a borrower could ever pay during the life of a loan.
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a_1=3,\ a_2=3+5=8,\ a_3=8+5=13,\ a_4=13+5=18\ \implies\ d=5\\\\a_n=a_1+(n-1)d\\\\a_n=3+(n-1)(5)\\\\a_n=3+5n-5\\\\a_n=5n-2\\\\ a_n=78\quad\implies\quad n=\,??\\\\78=5n-2\\\\78+2=5n\\\\5n=80\\\\n=16

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