Question

a bank advertises a 3/2 ARM at 3.75% with a 3/9 cap what is the maximum interest rate that can be charged during the fourth year

Answer 1

@Michele_Laino

Answer 2

I'm sorry, I'm not good in financial mathematics

Answer 3

@Gunboss ??

Answer 4

bro

Answer 5

I'm in 7th

Answer 6

Unless you want a number in the millions

Answer 7

Ask me

Answer 8

@zepdrix

Answer 9

@mathmate

Answer 10

Are you ready to spend time to understand the problem?

Answer 11

Since either you're busy, or you're not online, I will just leave you with reading, from which you can find your answer.
http://www.quickenloans.com/blog/adjustable-rate-mortgage-terms-arm-knowledge
3/2 ARM means initial (period) period = 3 years, adjustment periods = 2 years
3/9 cap means periodic cap = +3%, overall cap (over life of mortgage) = +9%.

Answer 12

hi

Answer 13

i got 6.75 is that right?

Answer 14

@mathmate

Answer 15

Yes, that's correct.

Answer 16

thank you

Answer 17

You're welcome! :)