ARMS and Floating Rate Loarys: Payment Basics Calculate Initial payment ??? D Assume an ARM for $120,000 with an initial interest rate of 6% with a term of 30 years with payments reset at the end of each year based on an index. If the market index were to rise at the end of one year and change the interest rate on the ARM to 8% what would be the new payment amount? Step 1: Find the loan balance at the end of Year 1 Balance = ???? Step 2: Find the new payment at 8% New payment = ??? What's the loan's Interest Payment amount for month 10 (Year 1)?