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Asume the index goes as follows yr158 yr27 yr37 yr46


Given the following answer the questions below:

1 year adjustable rate loan

Caps are 2%/8%

Margin is 2

30 years term

initial rate charged is 6%

Assume the index goes as follows: Yr.1=5.8% Yr.2=7% Yr.3=7% Yr.4=6% Yr.5= 9% Yr.6=12% Yr.7=5% Yr.8=14%

1:What is the rate charged in year2?

2:What is the rate charged in year5?

3:What is the rate charged in year8?

4.How many years would you plug into the mortgage constant for calculating the payment in the 5th year of the loan?

5.The maximum possible rate of interest is?

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Financial Management: Asume the index goes as follows yr158 yr27 yr37 yr46
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