You wish to purchase a property for $400,000. You intend to make a 20% down payment and you have the money to do so. You have two mortgage choices. You can finance the remaining 80% with a 30-year fixed rate mortgage at an interest rate of 3% with no closing costs (technically, the lender pays all closing costs at this rate). Alternatively, you can choose a 30 year, 5/1 ARM with an interest rate of 1%. The ARM has an annual cap of 2% and a lifetime cap of 5%, and $2,000 in closing costs. Assume a worst-case scenario (for you, the borrower) for interest rates throughout. What is the remaining balance on the ARM after 5 years?

(A) $273,102.07

(B) $320,000

(C) $258,245

(D) $375,327.24