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 Fully amortizing; however, negative amortization allowed if interest rate caps reached Based on estimated forward rates, the index to which the ARM is tied is forecasted as follows: Beginning of year (BOY) 2 = 7 percent; (BOY) 3 = 8.5 percent; (BOY) 4 = 9.5 percent; (BOY) 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. Complete this question by entering your answers in the tabs below. Required A Required B Compute the payments and loan balances for the ARM for the five-year period. (Do not round intermediat Round "Payments" to 2 decimal places and "Loan Balance" to the nearest dollar amount.) Year 1 Year 2 Year 3 Year 4 Year 5 Payments $ 12,192.66 X $ $ 10,621.88 $ $ 10,764.59 $ $ 10,747.96 $ $ 10,573.23 $ Loan Balance 131,807 X 121,185 X 110,421 X 99,673 X 89,100 X 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. Complete this question by entering your answers in the tabs below. Required A Required B Compute the yield for the ARM for the five-year period. (Do not round intermediate calculations. Round y decimal places.) Yield X% 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 Fully amortizing; however, negative amortization allowed if interest rate caps reached Based on estimated forward rates, the index to which the ARM is tied is forecasted as follows: Beginning of year (BOY) 2 = 7 percent; (BOY) 3 = 8.5 percent; (BOY) 4 = 9.5 percent; (BOY) 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. Complete this question by entering your answers in the tabs below. Required A Required B Compute the payments and loan balances for the ARM for the five-year period. (Do not round intermediat Round "Payments" to 2 decimal places and "Loan Balance" to the nearest dollar amount.) Year 1 Year 2 Year 3 Year 4 Year 5 Payments $ 12,192.66 X $ $ 10,621.88 $ $ 10,764.59 $ $ 10,747.96 $ $ 10,573.23 $ Loan Balance 131,807 X 121,185 X 110,421 X 99,673 X 89,100 X 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. Complete this question by entering your answers in the tabs below. Required A Required B Compute the yield for the ARM for the five-year period. (Do not round intermediate calculations. Round y decimal places.) Yield X%