# ARM, Loan Amount = $100,000, Starting Rate = 5%, Term = 30 Years, Adjustment Interval = 1 Year

## Question: 18. ARM, Loan Amount = $100,000, Starting Rate = 5…

- ARM, Loan Amount = $100,000, Starting Rate = 5%, Term = 30 Years, Adjustment Interval = 1 Year, what is the payment? N360

**Two points**

18/1: If the new rate after the first year become 6% what will be the new monthly payment?

**Two points**

18/2 if the interest rate hike to 9 %, and there was an interest rate cap of 3% from the initial rate (5%) what will be the new interest rate?

**Three points**

18/3 if the interest rate hike to 9 %, and there was a payment cap of 5% how much the payment will be?

**Three points**

18/4 in the last question (18/3), if this started after year 15 (from year1- year 15 the rate was 5% then hike to 9% and there 5% cap on payment) and will continue for the end of the loan maturity. How much the borrower should pay in the end of the loan life to free his house deed?

**One Point**

18/5 in the last question (18/4), what we called this kind of amortization