11. A 30-year ARM with an initial interest rate of 8 percent, a 2 percent margin, a 15 percent ceiling, a 7 percent floor, and a 3- percent-per-year cap is available. The cur¬ rent interest rate index is 6 percent.

(a) . Explain these terms to a person wish¬ ing to purchase a $150,000 house.

(b) . If the interest rate index increases to 9 percent next year, what interest rate will be paid on the mortgage?