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Question
An ARM has a 5/1 cap (i.e., the rate cannot increase more than 1 percent per year and 5 percent over the life of the mortgage). What will the mortgage rate be after three years if the initial rate is 5%, and interest rates increase by 2% in each of the first three years of the contract?a. 6%
b. 7%
c. 8%
d. 9%
e. 10%
Answer
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Related questions
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a. The USA Patriot Act
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c. The 9/11 Act
d. The U.S. Treasury Department Act
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