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An ARM for $101,700 is made at a time when the expected start rate is 5 percent. The loan will be made with a teaser

An ARM for $101,700 is made at a time when the expected start rate is 5 percent. The loan will be made with a teaser rate of 2 percent for the first year, after which the rate will be reset. The loan is fully amortizing, has a maturity of 25 years, and payments will be made monthly.

By what percentage will the monthly payments increase?

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