An adjustable-rate mortgage (ARM) ties monthly payments to a rate index (say, the US T-bill rate). Suppose you borrow $60,000 on an ARM for 30 years (360 monthly payments). The first 12 payments are governed by the current T-bill rate of 8 percent. In years 2–5, monthly payments are set at the year’s beginning monthly T-bill rate + 2 percent. Suppose the T-bill rates at the beginning of years 2–5 are as follows:

Year 2 ....................    10 percent

Year 3 ....................    13 percent

Year 4 ....................    15 percent

Year 5 ....................    10 percent

Determine the monthly payments during years 1–5 and each year’s ending balance.