The Following Problem Involves Adjustable-Rate Mortgage

Multiple Choice

The following problem involves adjustable-rate mortgage. You will need a table of monthly payments.
-Suppose your mortgage is $55,400 for 25 years. The index rate is 7.5% and the margin is 2.5%. After three years, the Treasury index decreases to 6.5%. Using the adjusted balance of $53,896.88, find the
New monthly payment.

A) $415.50
B) $503.42
C) $469.54
D) None of the above is correct.