Compute payments and loan balances and yield for the arm

Assignment Help Financial Management

Reference no: EM131327270

An ARM is made for $150,000 for 30 years with the following terms:

Initial interest rate= 7 percent
Index = 1-year treasuries
Payment reset each year
Margin= 2 percent
Interest rate cap= None
Payment cap = 5 percent increase in any year
Discount points = 2 percent

Fully amortizing; however, negative amortization allowed if payment cap reached

Based on estimated forward rates, the index to which the ARM is tied is forecasted as follows: Beginning of year (BOY) 2 7 percent; (BOY) 3 8.5 percent; (BOY) 4 9.5 percent; (BOY) 5 11 percent.

Compute the payments, loan balances, and yield for the ARM for the five-year period.

Reference no: EM131327270

Questions Cloud

Write a paper on the topic of therapeutic community : Write a Paper on the topic of Therapeutic Community in a correctional setting. The paper should include the following:A biopsychosocial description of the problem or population including recent research findings.A discussion of the social impact of ..

Excluding the escrow for taxes and insurance : Billy Bob and family are planning on purchasing a house for $432,000 using a 30 year fixed-rate mortgage from their local credit union. The mortgage rate offered to Billy Bob is 4.59%. Billy Bob will make a down payment of 20% of the purchase price t..

Evaluate the relevant laws or programs : In regard to your chosen aspect of diversity, identify and evaluate the relevant laws or programs that have either helped or restricted access to care and support.

What was your capital gain on this investment over the? year : Suppose you purchased 1,600 shares of Pan Am Airlines at the beginning of the year for ?$17.25 By the end of the? year, the stock price had appreciated to ?$18.63At the end of the? year, Pan Am paid a dividend of ?$0.64 per share. Calculate your capi..

Compute payments and loan balances and yield for the arm : Based on estimated forward rates, the index to which the ARM is tied is forecasted.- Compute the payments, loan balances, and yield for the ARM for the five-year period.

Bond market can influence firms capital structure : Why is depreciation expense added to Net Income on the Statement of Cash Flows? Explain how financial markets might influence Facebook's dividend policy. Explain how pricing in the bond market can influence a firm's capital structure (proportions of ..

Write a paper on children and substance abuse : Write a Paper on Children and Substance Abuse

Create the newsletter in a microsoft word document : Create the newsletter in a Microsoft Word document. Review your written draft and revise as needed. An elaborate design for the newsletter is not required. However, you may choose to include such elements as a name for the newsletter and a short t..

Identify whether you town is growing or declining : Discussion with no Plagiarism on ; Local and Global Communities" Please respond to one (1) of the following:Use the Internet to research the population of your community or town. City-Data, is a great Website to get you started.Identify whether yo..

User Account

All Pages