Optional Homework Problems: Lecture 7

The selling price of home was $250,000. Mary Ruth made a down payment of 20% and borrowed the balance. She was able to negotiate a 2-year ARM with an initial teaser rate of 2.25% and subsequent annual rates equal to the current 90-day T-Bill rate on the loan’s anniversary date (February 1) plus 1.25%. The loan is for 30 years with caps of 1 ... ................
................