A borrower takes out a 30-year adjustable rate mortgage loan for $280,000 with monthly payments (no fees). The first year of the loan has a "teaser" rate of 1.9%. After that, the rate can reset each year with a 2% maximum rate adjustment "cap". At the end of Year 1, interest rates go way up - to about 9%. What would the Year 2 monthly payment be? (Ch 5)

a. $1,311

b. $1,066

c. $931

d. $1,316