MY NOTES ASK YOUR TEACHER PRACTICE ANOTHER Suppose that the Carlsons have decided that they can afford a maximum of $3000/month for a monthly house payment. The bank has offered them a 5/1 ARM for a...





MY NOTES



ASK YOUR TEACHER


PRACTICE ANOTHER






Suppose that the Carlsons have decided that they can afford a maximum of $3000/month for a monthly house payment. The bank has offered them a 5/1 ARM for a term of 30 years with interest at the rate of 4.6%/year compounded monthly for the first 5 years and an interest-only loan for a term of 30 years at the rate of 4.84%/year for the first 5 years.


(a)


What is the maximum amount that they can borrow with the 5/1 ARM if they keep to their budget? (Round your answer to the nearest cent.)

$




(b)


What is the maximum amount that they can borrow with the interest only loan if they keep to their budget? (Round your answer to the nearest cent.)

$







Jun 06, 2022
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