ces Assume that a lender offers a 30-year, $147.000 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.