A Borrower Takes Out a 30-Year Adjustable Rate Mortgage Loan

question 8

Multiple Choice

A borrower takes out a 30-year adjustable rate mortgage loan for $200,000 with monthly payments.The first two years of the loan have a "teaser" rate of 4%,after that,the rate can reset with a 5% annual payment cap.On the reset date,the composite rate is 6%.Assume that the loan allows for negative amortization.What would be the outstanding balance on the loan at the end of Year 3?

• A)$190,074
• B)$192,337
• C)$192,812
• D)$192,926

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Definitions:

Discrimination

refers to unjust or prejudicial treatment of individuals, often based on race, age, gender, or other characteristics.

Unintentional

Actions or outcomes that occur without deliberate planning or intent, often leading to unexpected results.

Racial Stereotypes

Preconceived and oversimplified beliefs about individuals based on their race, often leading to prejudicial attitudes and discrimination.

Word Association

Word association involves the spontaneous or prompted thought connections between words, often used in psychology to explore the relationships and networks within an individual's mental lexicon.