2. Malika gets a monthly 30 year, 5/1 Adjustable Rate Mortgage for $950,000. The initial teaser rate of 2.75%, the interest then resets to 250 basis points above 1 year CMT. Malika calculates her initial payment to be $3,878.29. What will be her remaining loan balance right before the first interest rate reset (i.e. after she makes 60 payments)? State your answer as a positive number rounded to two decimal points (e.g. if the answer is $2345.123, write 2345.12)

3. Jessica took a 3/1 ARM for 30 years with monthly payments. Her teaser rate was 4.5%, and the interest rate is indexed to 1 year CMT rate with a 2.5% margin. At the beginning of year 4 of her mortgage, the 1 year CMT is 2%. At the time of the first reset Jessica's payment will ________________.

		Stay the same
		Increase
		Impossible to determine
		Decrease