Can be in excel or in Microsoft word. (MUST SHOW ALL WORK)
for excel show all steps and use formulae for computed cells to show work. For word submissions, similarly, show all calculator keystrokes and intermediate results. Point deductions otherwise.
Consider a FA 30yr LPM 5/1 ARM with no interest rate caps and no payment caps. The loan is for $500,000, with one point and other Regulation-Z fees of $10,000. The fixed period rate is 6% and the margin 2%. The underlying index at dates 0,1,2,3,4,5,6 years is 1%, 5%, 3%, 2%, 8%, 9%, 9%, respectively, and then stays at 9% until mortgage maturity.
What is the APR?