The capped and uncapped lifetime interest rates

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Reference no: EM131869277

cARM problem. Local lender Nice and SLO Mortgage offers a 30 year, $250,000 ARM under the following terms: Teaser rate (for one year) 2% Index 1 year COFI Annual reset Margin 2.5% Interest rate cap 2% annually, 5% lifetime..note that the adjusted rate can never be above 7% No payment caps No negative amortization 2 points charged Build a 5 year spreadsheet for this loan. The following forward COFI rates apply: BOY2 4%, BOY3 5%, BOY4 5.5%, BOY5 4.5%. You need one or more if statements to get excel to choose between the capped and uncapped lifetime interest rates. Solve for the yield (APR) to the lender.

Reference no: EM131869277

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