Welcome to Westonci.ca, your go-to destination for finding answers to all your questions. Join our expert community today! Discover in-depth answers to your questions from a wide network of professionals on our user-friendly Q&A platform. Our platform offers a seamless experience for finding reliable answers from a network of knowledgeable professionals.
Sagot :
The interest rate in during the initial period is given from which the
monthly payment is calculated to be $1682.94
Response (approximate value):
- The monthly payment during the initial period is $1,682.94
What is an ARM and how does it determine the monthly payment?
The type of loan Jackie obtains is an Adjustable Rate Mortgage, ARM,
loan, which is a 4/2 ARM
Therefore;
The introductory interest rate of 5% is fixed for the first 4 years, and will
be adjusted every 2 years after the first four years.
[tex]Initial \ monthly \ payment, \ M = \mathbf{\dfrac{P \cdot \left(\dfrac{r}{12} \right) \cdot \left(1+\dfrac{r}{12} \right)^n }{\left(1+\dfrac{r}{12} \right)^n - 1}}[/tex]
Where;
M = The monthly payment during the initial period
P = The amount on loan = $313,500
r = 5% = 0.05
n = 30 × 12 = 360
Which gives;
- [tex]M = \dfrac{313500 \times \left(\dfrac{0.05}{12} \right) \cdot \left(1+\dfrac{0.05}{12} \right)^{360} }{\left(1+\dfrac{0.05}{12} \right)^{360} - 1} \approx \mathbf{1682.94}[/tex]
- The monthly payment during the initial period, M ≈ $1,682.94
Learn more about mortgage payment calculations here:
https://brainly.com/question/2151755
Thanks for using our service. We're always here to provide accurate and up-to-date answers to all your queries. We hope our answers were useful. Return anytime for more information and answers to any other questions you have. Get the answers you need at Westonci.ca. Stay informed by returning for our latest expert advice.
