Ask Question
14 May, 22:25

An arm loan has a 4.00% start rate, and it is time for the first adjustment to be made. it has a periodic cap of 1% and a lifetime cap of 5%. assuming that the rate undergoes the maximum possible increase, what will the rate be after its first adjustment

+3
Answers (1)
  1. 14 May, 22:48
    0
    The rate after its first adjustment is 5%. The ARM adjustment would be controlled by the periodic cap, because the "true rate" or "fully-indexed rate" is 6.00% (1%+5%). Because the periodic cap prevents the start rate from moving any more than 2% at any given adjustment, the first move can only go as high as 5.00%.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “An arm loan has a 4.00% start rate, and it is time for the first adjustment to be made. it has a periodic cap of 1% and a lifetime cap of ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers