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%. Find the initial monthly payment.

Question

Quizplus · Accepted Answer

The initial interest rate for the adjustable-rate mortgage is the sum of the index rate and the margin, which is 7.5% + 2.5% = 10%. Using a mortgage calculator or a table for a $55,400 mortgage at 10% interest for 25 years, the initial monthly payment is approximately $503.42.

The Following Problem Involves Adjustable-Rate Mortgage