him to put a down payment of 20% of the value of the house. The loan terms are as follows:
Interest rate on the loan 1.8% a year for the first two years and then the rate will be 3-month SIBOR + 0.5 percent. This rate will be adjusted every 3 months after the first two years. The loan period will be 15 years. If loan is approved, the monthly payments will start from September 1, 2012
(a) Calculate the monthly payment on September 1, 2012.
(b) If the SIBOR rate is expected to be 1.2% on September 1, 2014, calculate the revised monthly payment on September 1, 2014.