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.

Assuming that the reset rate is 6 percent at the beginning of year (BOY) 2, what will the payments be?