2. Using tab 2 in the template, create the amortization spreadsheet and answer the following questions for a $700,000 10-year adjustable-rate mortgage (ARM) loan that is fully-amortizing and has monthly payments. A teaser rate of 4.4% applies to the mortgage payments and amortization during the first 2 years of the loan. After the second , the annual interest rate on the loan is equal to the going rate on an index + a margin of 2.7%, subject to an annual interest rate cap of 2.5% and a lifetime interest rate cap of 5.8% over the initial teaser rate. Expectations for the beginning-of-year values for the appropriate index are as follows: year, Year Index 3451 3.1% 4.7% 6.5% 6 2.5% 7 2.9% 8 5.1% 9 6.6% 10 6.0% a) Based on these expectations and conditions, what would be the actual (contract) interest rates applied to the mortgage payment during years 1 through 10? b) What would be the APR on this loan, if held until maturity – assuming up-front points of 2.0%? c) What is the outstanding balance at the end of year 6?