Consider a one-year (1/1), $150,000 ARM with a 30-year amortization period. The index rate is currently 3 percent, and you estimate that it will increase by 25bp each year for the following 2 years. The fixed margin is 200bp, but the lender is offering a teaser rate of 4 percent. Calculate the contract rate of year 1, year 2, and year 3. Year 1: 5%, Year 2: 5.25%, Year 3:5.5% O Year 1: 5%. Year 2: 5%, Year 3: 5.25% O Year 1: 4%. Year 2: 5.25%. Year 3:5.5% Year 1: 4%, Year 2: 5%. Year 3: 5.25%