1. Hailey and Sarah have received one more offer for a home mortgage. The purchase cost of the house ($473,000) remains the same and the time they expect to remain in the house (10 years) remains the same. Details of this new loan option are described below.

Option C: A 30-year adjustable rate mortgage (ARM) in which the initial interest rate is 4.25% for the first three years of the loan. After this initial three-year period, the interest rate will change as described below (the first 10 years of the ARM schedule are shown, given that Hailey and Sarah will sell the house after 10 years). This option will require a 22% down payment, which will be paid from their savings. The $5,500 in closing costs and fees will be included in the loan finance amount. Payments will be made on a monthly basis, and interest is compounded monthly.

n	1	2	3	4	5	6	7	8	9	10
i	4.25%	4.25%	4.25%	4.75%	4.75%	4.89%	4.89%	5.10%	5.10%	5.10%

1. Find the monthly payment for each of the 10 years of this adjustable rate mortgage.
2. Is this a better choice for them, relative to Options A and B outlined in Question 2? This time, support your choice by calculating the total interest paid over the first ten years in these scenarios.