A 7/1 hybrid Adjustable Rate Mortgage is initially made for $140,000 at five percent with a 30-year maturity. Assume that fixed payments are to be made monthly for seven years and that the loan is fully amortizing. Then, starting in year eight the loan become an ARM, and during year eight the interest rate resets (resets are assumed to be annual) to six percent. What will be the monthly payments for year eight?

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Loan amount PV 140000 interest rate 5 monthly interst rate i 512 00041... View the full answer