Question: PROBLEMC An interest only ARM is made for $200,000 for 30 years. The starting interest rate is 5% per year compounded monthly. (1) For the

PROBLEMC An interest only ARM is made for $200,000 for 30 years. The starting interest rate is 5% per year compounded monthly. (1)

PROBLEMC An interest only ARM is made for $200,000 for 30 years. The starting interest rate is 5% per year compounded monthly. (1) For the first 3 years, the borrower has an interest-only loan; (2) for the remainder of the loan monthly payments will be sufficient to fully amortize the loan at maturity, given a 6% annual interest rate (note that the interest rate has reset). Question 6 2 pts REFER TO THE PACKET, PROBLEM C. If the borrower makes interest payments only for the first 3 years, how much will the each monthly payment be? Only place numbers in the answer boxes. Do not place symbols or alphabetic characters. Question 7 3 pts REFER TO THE PACKET, PROBLEM C. Assume at the end of year 3 the interest rate resets to 6%. The borrower must now make monthly payments to fully amortize the loan. What will the new monthly payments be? Only place numbers in the answer boxes. Do not place symbols or alphabetic characters

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