9.A borrower is considering three competing mortgage loan offers from her bank. The amount borrowed on the mortgage is $100,000 with monthly compounding. The rate on the ARM resets at the end of the year 3. Assuming the ARM is reset at 5.5% (i.e. the remaining balance on the loan will now be repaid with 5.5% nominal annual interest), which of the three loans will have the smallest monthly payment after the rate reset, at the end of year 3?
A:A.30-year ARM.
B:B.15-year fixed-rate loan.
C:C.30-year fixed-rate loan. |