Chet has found a home he likes and is excited to analyze an adjustable rate mortgage with the following terms:

$\frac{7}{1}30-$year ARM @ $7\mathrm{.}00\%$

After the introductory rate, the rate charged will be the index rate $+1\%$ risk premium subject to the two constraints:

$-2\%$ annual increase cap

$10\mathrm{.}5\%$ maximum rate

In month $85$ the index rate is $7\mathrm{.}5\%.$ In month $97$ the index rate is $6\%.$ In month $109$ the index rate is $8\mathrm{.}5\%.$

The purchase price of the home is $$350,000.$ Chet is putting down $5\%$ of the purchase price and borrowing the remainder.

To help Chet, create an amortization table associated with this loan to complete this question. Record your answers to the following questions on the "Answers" sheet in the Exam Template:

$($a$)$ What payment and rate will be charged in month $85?(2\mathrm{.}5$ points$)$

$($b$)$ What payment and rate will be charged in month $97?(2\mathrm{.}5$ points$)$

$($c$)$ What payment and rate will be charged in month $109?(2\mathrm{.}5$ points$)$