Marta purchased a home with an adjustable rate mortgage. The margin on an adjustable-rate mortgage is 5.5% and the rate cap is 6.5% over the life of the loan. If the current index rate is 8.9%, find the maximum overall rate of the loan.
A) 19.7%
B) 18.5%
C) 19.2%
D) 20.9%
Correct Answer:
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