6-3. Suppose you are considering an ARM with the following characteristics: Mortgage amount $100,000 Index 1-year Treasury bill yield Margin 2.50 Maximum annual adjustment 2% Lifetime interest cap 6% Discount points 2.00 Loan maturity 30 years a. If the Treasury Bill yield is currently 3 percent, what is the monthly payment for the first year? (Assume the loan is fully indexed at the outset.) b. If the index moves to 4.5 percent at the end of the first year, what is the monthly payment for the second year? c. If the loan is paid off at the end of the second year, what is the effec- tive cost (yield)? 6-3. Suppose you are considering an ARM with the following characteristics: Mortgage amount $100,000 Index 1-year Treasury bill yield Margin 2.50 Maximum annual adjustment 2% Lifetime interest cap 6% Discount points 2.00 Loan maturity 30 years a. If the Treasury Bill yield is currently 3 percent, what is the monthly payment for the first year? (Assume the loan is fully indexed at the outset.) b. If the index moves to 4.5 percent at the end of the first year, what is the monthly payment for the second year? c. If the loan is paid off at the end of the second year, what is the effec- tive cost (yield)