Question

*Advance Algebra With Financial Applications *

Brent and Amanda are purchasing a house with a 30-year, 4/1 ARM for $395,000 at 4.65% with a
3/10 cap structure. What will the difference in payments be from year 4 to year 5?

$1,282.03

$883.47

$576.77

$686.49

Answer 1

define the payments for the first 4 years

define the balance after 4 years with those payments

restructure the payments with the remaining balance and the new interest rate

observe the difference

Answer 2

\[P=Bk^{12*t}\frac{1-k}{1-k^{12*t}}~:~k=(1+\frac r{12})\]
\[B_n=B_ok^{12*t}-P\frac{1-k^{12*t}}{1-k}\]

Answer 3

http://www.wolframalpha.com/input/?i=395000k%5E%2812*30%29%281-k%29%2F%281-k%5E%2812*30%29%29%2C+k%3D1%2B.0465%2F12

payments to start with are 2036.77

Answer 4

so for 4 years =2036.77

Answer 5

amistre64 please help me on my problem :( no one has helped me so far

Answer 6

The remaining balance to be restructured after 4 years is roughly: 368355 at 7.65 for 26 years left

Answer 7

http://www.wolframalpha.com/input/?i=395000k%5E%2812*4%29-2036.77%281-k%5E%2812*4%29%29%2F%281-k%29%2C+k%3D1%2B.0465%2F12

Answer 8

amistre, I will give you medal plus fan.. please help me...

Answer 9

ill look at it when im done ... just tag me in it

Answer 10

how do i tag?

Answer 11

http://www.wolframalpha.com/input/?i=368355k%5E%2812*26%29%281-k%29%2F%281-k%5E%2812*26%29%29%2C+k%3D1%2B.0765%2F12

the new payments for year 5 is roughtly 2723

Answer 12

so

2723
-2037
------
686 or there abouts?

Answer 13

yay!! its an option

Answer 14

:D THANK YOU SOO MUCH AGAIN !

Answer 15

How you get 26 ?

Answer 16

30 years minus 4 years leaves 26 years