Could you please confirm the composite rate in the red boxes is correct, and if #$1$ is correct please? Thanks.

Consider the following information and answer each of the questions below using arithmetic, algebra, and Excel functions as

appropriate. Larz is considering an ARM loan offered by a local lender. The loan amount is $$585,000.$ The term of the loan is $10$

years. The margin on the loan is $3\%.$ The teaser $($first year only$)$ is $1\%.$ The composite rate adjusts annually and is subject to

annual and lifetime caps of $2\%$ and $5\%,$ respectively. The loan does not provide for negative amortization nor does it provide

floors. Assume the following forecast of index rates. The prevailing rate in the market for similar FRM loans is $5\mathrm{.}25\%.$ Make no

changes to this Excel workbook other than entering information needed in the yellow and pink highlighted cells and your answer

calculation in the green highlighted cells. Only the green highlighted cells will be graded. Do not round intermediate calculations

$($let Excel store all decimal values$).$