Rachel is purchasing a condominium and is financing $485,000 with a 30-year 6/1 ARM at 4.95% with a 1/10 cap structure. What will her payments be at the beginning of year 7?

Rachel's payment will be $2,588.78

Step-by-step explanation:

Given that;

Loan amount L = $485,000

number of months n = 30 × 12 = 360

Interest rate per month C = 4.95 / (100 × 12) = 4.95/1200 = 0.004125

Now, using the formula

P = L[ c ( 1 + c )ⁿ / ( 1 + c )ⁿ - 1 )

we substitute

P = 485,000 × [ 0.004125 ( 1 + 0.004125 )³⁶⁰ / ( 1 + 0.004125 )³⁶⁰ - 1 )]

P = 485,000 × [ 0.01815619 / 3.4015 ]

P = 485,000 × 0.0053377

p = 2,588.78

Therefore, Rachel's payment will be $2,588.78

option: d is correct

step-by-step explanation:

step-by-step explanation:

the original amount doesn't ''re just looking for the time it takes for 1/2 of the substance to we have

(1/2) =)     take the ln   of both sides

ln (1/2)   = )   and we can write

ln(1/2) = ) lne     and lne   = 1     so we have

ln(1/2) = -.1092t     divide both sides by -.1092

t = ln(1/2)/-.1092 = about 6.347 days = about 6.3 days (rounded)