A borrower has been analyzing different adjustable rate mortgage $($ARM$)$ alternatives for the purchase of a property.

The borrower anticipates owning the property for five years. The lender first offers a $$151,000,30-$year fully amortizing

ARM with the following terms:

Initial interest rate $=6$ percent

Index $=1-$year Treasuries

Payments reset each year

Margin $=2$ percent

Interest rate cap $=$ None

Payment cap $=$ None

Negative amortization $=$ Not allowed

Discount points $=2$ percent

Based on estimated forward rates, the index to which the ARM is tied is forecasted as follows: Beginning of year $($BOY$)$

$2=7$ percent; $(BOY)3=8\mathrm{.}5$ percent; $(BOY)4=9\mathrm{.}5$ percent; $(BOY)5=11$ percent.

Required:

a$.$ Compute the payments and loan balances for the unrestricted ARM for the five$-$year period.

b$.$ Compute the yield for the unrestricted ARM for the five$-$year period.

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Required B

Compute the payments and loan balances for the unrestricted ARM for the five$-$year period.

Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar.