Given the following answer the questions below:
1 year adjustable rate loan
Caps are 2%/8%
Margin is 2
30 years term
initial rate charged is 6%
Assume the index goes as follows: Yr.1=5.8% Yr.2=7% Yr.3=7% Yr.4=6% Yr.5= 9% Yr.6=12% Yr.7=5% Yr.8=14%
1:What is the rate charged in year2?
2:What is the rate charged in year5?
3:What is the rate charged in year8?
4.How many years would you plug into the mortgage constant for calculating the payment in the 5th year of the loan?
5.The maximum possible rate of interest is?