Consider a loan amount of $80,000 with a term of 30 years. Assume that the ARM interest rate will be adjusted annually with the first adjustment at the beginning of the second year. At that time, the composite rate on the loan will be determined by the index of one-year Treasury securities plus a 2% margin. If we assume
(1) the first year composite rate is 6% and the index of one-year Treasury securities takes on a pattern of 7, 9, 11 and 9 percent for the next four years
(2) that the loan is held for five years, and
(3) that monthly payment and interest rate adjustments are made annually, what would the loan balance be at the end of the second year of the repayment period?
O Between 79,007 and 79,027
O Between 76,857 and 76,877
O Between 78,413 and 78,433
O Between 77,964 and 77,984