finished number one, looking for number 2-5, all are based off number 2

1) The year 1 interest rate on an ARM is 6% and has an interest rate cap of 1%. If the year 2 interest rate rose to 9%, what will be the composite interest rate actually reset on year 2? Select one: a. 9% O b. 7% C 10% d. 6% (2) A3/1 ARM is made for $250,000 at 7% with a 30-year maturity. Fixed payments are to be made monthly for three years, after which the interest rate will reset. --> If the loan is fully amortizing, what will be the monthly payments? Answer: (3) What will be the loan balance after three years? Answer: (4) What would new payments be beginning in year 4 if the interest rate fell to 6% and the loan continued to be fully amortizing? Answer: (5) Refer to the original question (2, 3), assuming the INTEREST RATE CAP of 2%, what would new payments be beginning in year 4 if the interest rate instead rose to 10%? Hint: the capped rate does not allow the new rate to go above certain point