Consider an adjustable-rate mortgage (ARM) loan for $143,000. The interest rate is indexed to the 1year T-bill yield. The loan has a margin of 2%, a one-year teaser rate of 1%, an annual rate cap of 2% and a lifetime rate cap of 5%. The loan requires monthly payments for 15 years. The lender charges 1 point at origination. Assume that T-Bill yields are as follows: At origination (months 112 ) 3.5% At end of first year (months 13-24) 5.3\% What is the effective interest rate if the borrower prepays the loan at the end of the 24 th month? 4.5% 6.0% 6.5% 8.80%