Question

HELP 4 MEDAL !

Chris and Justine are purchasing a townhouse and finance $112,900 with a 25-year 6/3 ARM at 4.85% with a 2/12 cap structure. What will their payments be at the beginning of the seventh year assuming they are charged the maximum interest rate for that year?

$759.70

$557.09

$674.48

$650.17
I used this formula ->Bm = P[((1+i)^(n*t)-(1-i)^(m))/((1+i)^(n*t)-(1))]

Answer 1

I plugged in
P=112900
I=4.85%/12=0.004041667
N=12
T=25
M=6*12=72

I got 125032

Next I added new info !
I=0.0685/12 = 0.005708333 <--- ( 4.85 + 2 = 6.85%)
N=12
T-25-6 = 19

and I got 127231 .. What do I do next .. ?

Answer 2

@phi

Answer 3

@Hero