The Following Problem Involves Adjustable-Rate Mortgage

Multiple Choice

The following problem involves adjustable-rate mortgage. You will need a table of monthly payments.
-Harry has a 1-year ARM for $85,000 over a 30-year term. The margin is 2%, and the index rate starts out at 8.5% and increases to 10% at the first adjustment. The balance of principal at the end of
The first year is $74,113.56. Find the amount of monthly payment for the first month of the first year.

A) $689.42
B) $777.53
C) $718.14
D) None of the above is correct.