Question: A standard ARM has a cap such that the rate cannot increase more than 1 percent per year and 5 percent over the life of

A standard ARM has a cap such that the rate cannot increase more than 1 percent per year and 5 percent over the life of the mortgage. What will the mortgage rate be after three years if the initial rate is 5%, and interest rates increase by 2% in each of the first three years of the contract?
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