Question

Marian has an adjustable rate mortgage loan that has an initial interest rate of 4%. The margin on the loan is 2%. If the index is 5% in the second year, what is the interest rate charged to Marian? a) 4% b) 5% c) 6% d) 7%

Answer 1

Answer: D) 7%, If the initial (Starting) rate is 4% and there’s a margin loan which is 2% is equals to 6%. When the second year starts the index (number, or details) is 5% and the margin loan still 2% then it’s equals to 7%.