Health Sciences homework help. An ARM is made for $50,000 for 30 years with the following terms:Initial interest rate = 1 percentIndex = 1-year TreasuriesPayments reset each yearMargin = 200 basis pointsInterest rate cap = nonePayment cap = noneDiscount points = 1 pointNegative amortization is not allowedBased on estimated forward rates, the 1-year Treasury yields to which the ARM is tied is forecasted as follows:Beginning of year (BOY) 2 = one percent (1%); (BOY) 3 = two percent (2%); (BOY) 4 = 3.5%; (BOY) 5 = 5%Compute the interest rate, monthly payments, and loan balances for each year for this unrestricted ARM, and the yield for the entire five-year period.
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