Assume that a lender offers a 30 -year, $140,000 adjustable rate mortgage (ARM) with the following terms: Initial interest rate =7.5 percent Index = one-year Treasuries Payments reset each year Margin =2 percent Interest rate cap =1 percent annually; 3 percent lifetime 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; (BO ) 3=8.5 percent: (BOY)4=9.5 percent; (BO ) 5=11 percent. Required: a. Compute the payments and loan balances for the ARM for the five-year period. b. Compute the yield for the ARM for the five-year period