Suppose you take a 30-year, one-year adjustable, monthly payment ARM of $360,000 with two discount points. Your payment in year one is $2,158.38, your payment in year two is $2,509.39, and your outstanding balance at the end of year two is $352,014. If you repay the loan at the end of year two, what is the effective cost?

Answer rating: 100% (QA)

To calculate the effective cost of the loan we need to consider the total amount of payments made du... View the full answer