You have taken out a 1/1 ARM (the teaser rate is locked for 1 year, and after this 1-year initial period, interest rate begins to adjust per year) with the following loan terms: Loan amount: $300,000 Annual rate cap: 2% Lifetime cap: 6% Margin: 300 bps (3%) Teaser rate (annual): 5% Market index rate at the beginning of year 1: 5.5% Market index rate at the beginning of year 2: 6.5% Loan term in years: 30 years Q8: Please calculate the monthly payment for year 2

Group of answer choices

$1,966.46

$2,016.39

$1,986.64

$1,975.12

No answer within +/-$10.0 of the correct one.