Please show computations on paper.

1. You are seeking a (30-year) ARM loan of $225,000 which will charge 2.5 points. You will also incur $1400 in other third party closing costs related to this loan. Assuming you keep this loan for 4 years, what are your CF's, the yield to lender and cost to borrower (expressed as APR's)? What do you pay each year in interest? Initial rate 2.75% Annual adjustments Tbill +2.0% (rounded to 1/8% ) No payment or interest rate caps - Tbill Index, now at 1.93, then changes annually to: 3.73,5.62,7.26 Is this loan teased? Explain. On separate paper complete your handwritten computations. This will probably require more than one page to show all of your work, including the table of cash flows you use to compute the Lender Yield. After completing your calculations summarize the results in the table given below. Be sure to turn in your handwritten calculations as well as the completed table shown below or you will receive zero for this assignment. 1. You are seeking a (30-year) ARM loan of $225,000 which will charge 2.5 points. You will also incur $1400 in other third party closing costs related to this loan. Assuming you keep this loan for 4 years, what are your CF's, the yield to lender and cost to borrower (expressed as APR's)? What do you pay each year in interest? Initial rate 2.75% Annual adjustments Tbill +2.0% (rounded to 1/8% ) No payment or interest rate caps - Tbill Index, now at 1.93, then changes annually to: 3.73,5.62,7.26 Is this loan teased? Explain. On separate paper complete your handwritten computations. This will probably require more than one page to show all of your work, including the table of cash flows you use to compute the Lender Yield. After completing your calculations summarize the results in the table given below. Be sure to turn in your handwritten calculations as well as the completed table shown below or you will receive zero for this assignment