Borrowing $$100,000$ for a home purchase. You decide to use an ARM $($adjustable rate mortgage$).$ The initial rate is $10\%$ and the loan term is $20$ years.

After year one the rate moves up to $13\%$

What's the NEW monthly payment when loan resets?

Question $4$ options:

$$13,982\mathrm{.}33$

$$1,165\mathrm{.}24$

$$11,577$

$$964\mathrm{.}75$