1. Given the following information for a 30-year, $75,000 capped ARM loan, find the interest rate and ending balance for year 2: Margin = 2.75 percentage points, index for year 1 = 2.50 percent; Index for year 2 = 2.75 percent; teaser rate for year 1 = 4.00 percent; periodic cap = 1.00 percent; overall cap = 5.00 percent; monthly payments. Assume that the cap applies to the teaser rate.

2. Consider a 30-year graduated-payment mortgage on a $250,000 mortgage with yearly payments. The stated interest rate on the mortgage is 6%, but the 1st annual payment is calculated assuming a 3% rate for the life of the loan. Thereafter, the annual payment will grow by 3.151222%. Develop an amortization table for this loan.