Question: please use the formula not excel 5. A bank originates a 30 year fully amortizing FRM at an annual interest rate of 5.5%. 9 years

please use the formula not excel

5. A bank originates a 30 year fully amortizing FRM at an annual interest rate of 5.5%. 9 years later the banks cost of funds is 12.50%. What is the banks NIM on this loan?

(Your answer can be positive or negative, use the correct sign!)

6. Tim wants to buy an apartment that costs $1,750,000 with an 85% LTV mortgage. Tim got a 30 year, 3/1 ARM with an initial teaser rate of 4.875%. The reset margin on the loan is 300 basis points above 1 year CMT. There are no caps. Tim anticipates the index to be 3.50% at the time of the 1^st reset.

What is Tims monthly mortgage payment going to be during the 1^st 3 years?

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