42. Adjustable-Rate Mortgage The Cunninghams purchased a new home for $375,000 with a down payment of $140,000. They obtained a 15-year adjustable rate mort- gage with the following terms. The interest rate is based on the one-year Treasury bill rate, which is currently at 1.0%, and the add-on rate, which is 3.5%. The initial rate period is 5 years, and thereafter the interest rate is adjusted once a year and a new monthly mortgage payment is calculated. a) Determine the Cunninghams' initial ARM rate. b) Determine the Cunninghams' initial monthly payment for principal and interest. c) If, after the 5-year initial rate period, the rate of the one-year Treasury bill rises to 2.5%, determine the Cunninghams' new ARM rate. 10.6