1)

2)

Compute the yield for the unrestricted ARM for the five-year period. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) A builder is offering $111,797 loans for his properties at 9 percent for 25 years. Monthly payments are based on current market rates 9.5 percent and are to be fully amortized over 25 years. The property would normally sell for $120,000 without any special financing Required: a. At what price should the builder sell the properties to earn, in effect, the market rate of interest on the loan? Assume that the buye would have the loan for the entire term of 25 years. Complete this question by entering your answers in the tabs below. At what price should the builder sell the properties to earn, in effect, the market rate of interest on the loan? Assume that the buyer would have the loan for the entire term of 25 years. (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.) A borrower has been analyzing different adjustable rate mortgage (ARM) alternatives for the purchase of a property. The borrower anticipates owning the property for five years. The lender first offers a $146,000,30-year fully amortizing ARM with the following terms: Initial interest rate =6 percent Index =1-year Treasuries Payments reset each year Margin =2 percent Interest rate cap = None Payment cap = None Negative amortization = Not allowed Discount points =2 percent Based on estimated forward rates, the index to which the ARM is tied is forecasted as follows: Beginning of year ( BOY ) 2=9 percent; (BOY) 3=10.5 percent; ( BOY 4=11.5 percent; ( BOY 5=13 percent. Required: a. Compute the payments and loan balances for the unrestricted ARM for the five-year period. b. Compute the yield for the unrestricted ARM for the five-year period. Complete this question by entering your answers in the tabs below. Compute the payments and loan balances for the unrestricted ARM for the five-year period. (Do not round intermediate calculations. Round "Payments" to 2 decimal places and "Loan Balance" to the nearest dollar amount.)