Suppose that you are considering taking out an adjustable-rate mortgage with the following terms: Amount borrowed: $750,000 Index rate: Prime Rate (Currently 4.25%) Margin: 200 basis points. Periodic cap: 1.5 percentage points Lifetime cap: 5 percentage points Amortization: 1 25 years If the interest rate changes at the end of every year and the prime rate falls to 3.80% during the first year, what will your payment be in year 2? $4,530 $4,341 $5,191 $4,747