Question $1(10$ points$)$

A basic ARM is made for $$200,000$ at an initial interest rate of $6\%$ per year for $30$

years with an annual reset date. The borrower believes that the interest rate at the

beginning of year BOY $2$ will increase to $7\%.$ Assuming that a fully amortizing loan is

made, what will monthly payments be during year $1($rounded to the nearest dollar$)?$