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What is the initial monthly payment on mortgage

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Reference no: EM132474022

Consider a 30-year, $420,000 loan with a 6% fixed interest rate with payments that are structured as follows. During the first three years, the payment is calculated as if it were an interest-only loan at 4%. After that, the payment adjusts so that the loan fully amortizes over the final 27 years.

(a) What is the initial monthly payment on this mortgage?

(b) How much will the borrower owe at the end of the 3rd year?

(c) What will be the new monthly payment starting in year 4?

Reference no: EM132474022

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