An interest$-$only ARM is made for $$200,000$ for $30$ years. The start rate is $5$ percest and the borrower will $(1)$ make monthly interest$-$eely payments for three years. Pagments sliereafler must be sufficient to fully amortize the loas at matarity.

Truland, ans $132-$ letiluat $144$

Howoll lise in

Final PDF to printer

Onweter $5$ Alpobably and Fluariey Rarr Mortpape Lows $145$

a$.$ If the berrower makes interest$-$coly payments for three years, what will the payments be$?$

b$.$ Assume that at the end of year $3,$ the reser rate is $6$ percest. The borrower most now make payments so as to fully amortize the loas. What will the paymenss be$?$