Question 1 A lender offers a 30-year, $150,000 ARM with the following terms: Index: one-year Treasury rate Margin: 2% Annual rate cap: 1% Lifetime rate cap: 3% Compute the monthly payments for the first 5 years, given that the index to which the ARM tied to will take the following value: Year At signing the ARM contract End of year 1 End of year 2 End of year 3 End of year 4 One-year Treasury rate 5.5% 7% 8.5% 9.5% 11%