Consider an adjustable rate mortgage of $90,000 with a maturity of 30 years and monthly payments. at the end of each year, the interest rate is adjusted to become two percentage points above the index. annual cap of 300 basis points (3%), and a lifetime cap of 500 basis points (5%). in the there is an first year the contract rate is 6%, with no teaser. in year two, the index rate is 8%. 9. what is the contract rate in year two? b.10% e.9% d. 11% 10. what monthly payment is called for in year two? a. $786 b. $795 c. $720 d. s648

John and daphne are saving for their daughter ellen's college education. ellen just turned 10 at (t = 0), and she will be entering college 8 years from now (at t = 8). college tuition and expenses at state u. are currently $14,500 a year, but they are expected to increase at a rate of 3.5% a year. ellen should graduate in 4 years--if she takes longer or wants to go to graduate school, she will be on her own. tuition and other costs will be due at the beginning of each school year (at t = 8, 9, 10, and 11).so far, john and daphne have accumulated $15,000 in their college savings account (at t = 0). their long-run financial plan is to add an additional $5,000 in each of the next 4 years (at t = 1, 2, 3, and 4). then they plan to make 3 equal annual contributions in each of the following years, t = 5, 6, and 7. they expect their investment account to earn 9%. how large must the annual payments at t = 5, 6, and 7 be to cover ellen's anticipated college costs? a. $1,965.21b. $2,068.64c. $2,177.51d. $2,292.12e. $2,412.76