A borrower has been analyzing different adjustable rate mortgage $($ARM$)$ alternatives for the purchase of a property. The borrower anticipates owning the property for five years. The lender first offers a $$158,000,30-$year fully amortizing ARM with the following terms:nitial interest rate $=6$ percentIndex $=1-$year TreasuriesPayments reset each yearMargin $=2$ percentInterest rate cap $=$ NonePayment cap $=$ NoneNegative amortization $=$ Not allowedDiscount points $=2$ percentBased on estimated forward rates, the index to which the ARM is tied is forecasted as follows: Beginning of year $($BOY $2=7$ percent;$($BOY $3=8\mathrm{.}5$ percent; $($BOY$)4=9\mathrm{.}5$ percent; $($BOY$)5=11$ percent.Required:a$.$ Compute the payments and loan balances for the unrestricted ARM for the five$-$year period.b$.$ Compute the yield for the unrestricted ARM for the five$-$year period.Complete this question by entering your answers in the tabs below.Save $8$Required ARequired B

A borrower has been analyzing different adjustable rate mortgage $($ARM$)$ alternatives for the purchase of a property. The borrower

anticipates owning the property for five years. The lender first offers a $$158,000,30-$year fully amortizing ARM with the following terms:

Initial interest rate $=6$ percent

Index $=1-$year Treasuries

Payments reset each year

Margin $=2$ percent

Interest rate cap $=$ None

Payment cap $=$ None

Negative amortization $=$ Not allowed

Discount points $=2$ percent

Based on estimated forward rates, the index to which the ARM is tied is forecasted as follows: Beginning of year $($BOY$)2=7$ percent;

$($BOY$)3=8\mathrm{.}5$ percent; $(BOY)4=9\mathrm{.}5$ percent; $(BOY)5=11$ percent.

Required:

a$.$ Compute the payments and loan balances for the unrestricted ARM for the five$-$year period.

b$.$ Compute the yield for the unrestricted ARM for the five$-$year period.

Complete this question by entering your answers in the tabs below.

Compute the payments and loan balances for the unrestricted ARM for the five$-$year period.

Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar.