Given the following Adjustable Rate Mortgage (ARM): Loan amount: $100,000 Term: 20 years, monthly payment Discount point: 0 Origination fee: $8,000 Teaser rate: 7.5% Margin: 225 basis points Rate caps: 2.5% annually. 6% lifetime Market Index: EOY 1 2 3 Index 8.6% 9.5% 10.5% 4 5 10.5% 11.5% What are the composite interest rates for year 2 through year 6? 10%, 12.5%, 13.5%, 13.5%, 13.5% None of the above is all correct 10.85%, 11.75%, 12.75%; 13.75%, 12.75% 10%, 11.75%, 12.75%: 13.5%; 12.75% Given the following Adjustable Rate Mortgage (ARM): Loan amount: $100,000 Term: 20 years, monthly payment Discount point: 0 Origination fee: $8,000 Teaser rate: 7.5% Margin: 225 basis points Rate caps: 2.5% annually, 6% lifetime Market Index: EOY 1 2 3 Index 8.6% 9.5% 10.5% What is the monthly payment of the 2nd year? 4 5 10.5% 11.5% 0 959.25 1007:36 897.25 805.59