Please use the following information to answer questions below.

	Adjusted Rate Mortgage
Mortgage Amount	$100,000
Term	6 years with annual payment
Adjustment Period	One Year Adjustable
Discount Points	0
Costs with Loan Origination	$8,000
Initial Contract Interest Rate	7.50%
Margin	2.25%
Caps	2.5% annual, 6% lifetime
Market Index	End of Year (EOY) 1: 8.6%; EOY 2: 9.5%; EOY 3: 10.5%; EOY 4: 7.25%

Questions [5 points for each question]

1. What are the interest rates in year 2 to year 5?
2. What is the remaining balance by the end of the 1^st year?
3. What is the annual payment in the 2^nd year?
4. What is the effective cost of this loan if you hold the loan for only one year?