Question: Please Help me with the following question Problem 5 [20 points] You have the following two mortgage choices: Fixedrate Mortgage 2/1 Interest-only ARM Mortgage Amount

Please Help me with the following question

Problem 5 [20 points] You have the following two mortgage choices: Fixedrate Mortgage 2/1 Interest-only ARM Mortgage Amount $100,000 $100,000 Term 3 years with annual PMT 3 years with annual PMT The payment rises each year Discounts Points 0 0 Costs with Loan Orignation $1,000 $1,000 Initial Contract Interest Rate 11.00% 10.00% Margin 2.00% Caps no annual cap; 3% lifetime cap Market Index End of Year (EOY) 1: 7.0%; EOY 2: 4.5% Calculate APR for each mortgage choice

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