PLEASE SHOW ALL WORK SPECIFICALLY HOW TO DO IT ON A CALCULATOR.

List each step and show where the numbers came from and how they are used.

Assume the following information for a 30 -year, $180,000 ARM loan: margin: 3% ( 300 basis points); index rate at the beginning of year 2 : 3%; initial interest (teaser rate): 4.5%; no periodic cap. What is the contract interest rate at the beginning of year 2 ? 6.0% 5.5% 4.5% 4.0%