Question: You are purchasing a house for $200,000 with a down payment of 20% and you have decided to use a 30-year adjustable-rate mortgage. The terms

You are purchasing a house for $200,000 with a down payment of 20% and you have decided to use a 30-year adjustable-rate mortgage. The terms of the mortgage are as follows: the interest rate is based on a 1-year treasury bill and interest rate is adjusted every year; the margin is 2.75%, and the annual interest rate cap is 2%. The initial mortgage interest rate is 5.375%. Q1. What is the initial monthly payment?

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