Consider a basic Adjustable. Rate Mortgage $($ARM$)$ of $$5,000,000$ at an inical intereat nate of $2\mathrm{.}15\%$ for $30$ years, with an annual interest rate reset:

a$.$ Calculate the moethly payments during the first year, assuming a fully amortizing bas structure. $(2$ marks$)$

b$.$ Using your calculation from $($a$),$ determine the loan balance at the end of the first ycar. $(2$ marks$)$

c$.$ If the interest rate increases to $2\mathrm{.}5\%$ at the beginning of the second year, calculace be new monthly payments for ycar $2.(2$ marks$)$

d$.$ Based on the new interest rate from $($c$),$ compute the loan balance at the end of ycar two.

$1$

$(2$ marks$)$

e$.$ If the payments were interest$-$only, what would the monthly payments be during year $11(2$ marks$)$

f$.$ Continuing from $($e$),$ with the interest rate change to $2\mathrm{.}5\%$ as described in $($c$),$ whot woold the interest$-$only monthly payments be during year $27(2$ marks$)$