Question: 3 Assume a 2/1 ARM without cap. Term=30 years. Initial loan balance=$200,000. The teaser rate=7% margin=2%. What is the mortgage rate for Year 2? Mortgage

Assume a 2/1 ARM without cap. Term=30 years. Initial loan balance=$200,000. The teaser rate=7% margin=2%. What is the mortgage rate for Year 2? Mortgage Beginning mortgage rate balance payment Year LIBOR Interest payment End bala Principal payment 1 8.60% 2 9.50% 3 10% Select one: a. 7% b. 12% C. 11.5% d: 9.5%

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