You have been offered a GPM loan that is originated for $150,000 at 7 percent for 30 years. Payments are scheduled to graduate at the rate of 7.5 percent for the first five years of the loan.
a. Compute the payments required for the first six years on the loan term.
b. What would the payment be if a FRM (constant payment mortgage) loan was available instead.
c. After 10 years what is the balance due on the GPM loan?