B. COMPUTE THE YIELD FOR THE ARM FOR THE FIVE-YEAR PERIOD

Payments reset each year Margin =2 percent Interest rate cap = None Payment cap =5 percent increase in any year Discount points =2 percent Fully amortizing; however, negative amortization allowed if payment cap reached Based on estimated forward rates, the index to which the ARM is tied is forecasted as follows: Beginning of year (BOY)2=7 percent; (BOY) 3=8.5 percent; ( BOY )4=9.5 percent; (BOY)5=11 percent. Required: a. Compute the payments and loan balances for the ARM for the five-year period. b. Compute the yield for the ARM for the five-year period. Complete this question by entering your answers in the tabs below. Compute the payments and Ioan balances for the 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.) Payments reset each year Margin =2 percent Interest rate cap = None Payment cap =5 percent increase in any year Discount points =2 percent Fully amortizing; however, negative amortization allowed if payment cap reached Based on estimated forward rates, the index to which the ARM is tied is forecasted as follows: Beginning of year (BOY)2=7 percent; (BOY) 3=8.5 percent; ( BOY )4=9.5 percent; (BOY)5=11 percent. Required: a. Compute the payments and loan balances for the ARM for the five-year period. b. Compute the yield for the ARM for the five-year period. Complete this question by entering your answers in the tabs below. Compute the payments and Ioan balances for the 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.)