Suppose a one-year ARM loan has a margin of 2.75 percent, a teaser rate for the first year of 4.00 percent, and a cap of 1.00 percent. The index rate is 3.00 percent at both the beginning and the end of the first year. Required: a. If the periodic cap applies to teaser rate, what will be the interest rate on the foan in year two? b. If the periodic cap applies only to index plus margin, what will be the interest rate on the loan in year two? Note: For all requirements, enter your answer as a percentage rounded to 2 decimal places (i.e. 0.1234 should be entered as 12.34)