Question $19$

Sarah has an Adjustable$-$rate Mortgage $($ARM$)$ with an initial interest rate of $4\mathrm{.}0\%$ for the first five years. If the market interest rates decrease by $0\mathrm{.}75\%$ after

this initial period, what will be Sarah's new interest rate on her ARM?

$4\%$

$2\mathrm{.}98\%$

$4\mathrm{.}75\%$

$3\mathrm{.}25\%$