Lary is considering an ARM loan offered by a local lender. The loan amount is $300,000. The term of the loan is 10 years. The index today is 2%. The margin on the loan is 2%. The teaser (first year only) is 1%. The composite rate adjusts annually and is subject to annual and lifetime caps of 2% and 5%. The loan does not provide for negative amortization nor does it provide floors. The loan requires 2 points at origination. The prevailing rate in the market for similar FRM loans is 6.25%. Assume the following forecast of index rates. What is the amount of the payment due in each of months 25 through 36? Hint: open the "answer" spreadsheet for the ARM Excel assignment and make a few edits. Year Index Rate Forecast 0 2.00% 1 2.25% 2 2.50% 3 3.10% 4 4.15% 5 7.50% 6 5.50% 7 7.50% 8 8.00% 9 4.10%