Question: Can you please help me with question below A borrower takes out a hybrid mortgage loan for $200,000 with monthly payments. Thisloancombines elements of fixed-rate

Can you please help me with question below

A borrower takes out a "hybrid mortgage loan" for $200,000 with monthly payments. Thisloancombines elements of fixed-rate mortgage (FRMs)for periods of 2 years, afterwhichinterest rates are reset and the loan becomes an adjustable mortgage (ARM).The amortization period is 30 years. The first two years of the loan have a "teaser" rate of 4%. Afterthat, the interest rate can reset with a 2% annual interest ratecap. Assume that on the reset date, the composite rate (i.e., the market index plus the margin)is 5%. What would the Year3 monthly payment be?

Is it

955?

1067?

1071?

1186?

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