The following problem involves adjustable-rate mortgage. You will need a table of monthly payments.
-Suppose your mortgage is $55,400 for 25 years. The index rate is 7.5% and the margin is 2.5%. After three years, the Treasury index decreases to 6.5%. Using the adjusted balance of $53,896.88, find the
New monthly payment.

Question

Quizplus · Accepted Answer

The new interest rate after adjustment is 6.5% (index) + 2.5% (margin) = 9%. Using the adjusted balance of $53,896.88 and a 9% interest rate for the remaining 22 years, the monthly payment is approximately $469.54.

The Following Problem Involves Adjustable-Rate Mortgage