You Have Taken Out a $225,000, 3/1 ARM

question 13

Multiple Choice

You have taken out a $225,000, 3/1 ARM. The initial rate of 5.8% (annual) is locked in for 3 years and is expected to increase to 6.5% at the end of the lock period. Calculate the initial payment on the loan. (Note: the term on this 3/1 ARM is 30 years)

• A) $1,320.19
• B) $1,422.15
• C) $1,874.45
• D) $1959.99

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Definitions:

Behavior

Behavior encompasses the actions and reactions of an individual or group in response to external or internal stimuli.

Evolutionary Psychology

An approach in both social and natural sciences that looks at psychological structures through the lens of contemporary evolutionary theory.

Survival System

Strategies or mechanisms developed by individuals or groups to ensure their continued existence and well-being in the face of challenges or threats.

Behavior

The actions or reactions of an organism or system, often in response to external stimuli, encompassing a wide range of activities and responses.