Determining the terms of the loan

Reference no: EM131795860

Question: A borrower is given a $500,000 30 year fully amortizing ARM with an initial rate of 3.25%. The terms of the loan are as follows: The loan's interest rate will adjust annually according to the 10 year LIBOR index, no interest rate caps or floors, has a margin of 1.5%. In year 2, LIBOR is at 4.25%. In year 3, LIBOR is at 3.5% What is the payment on this loan in year 3?

Reference no: EM131795860

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