The Blackrock Community Bank makes a basic ARM loan for $300,000 at an initial annual interest rate of 5.5% for 30 years

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The Blackrock Community Bank makes a basic ARM loan for $300,000at aninitial annual interest rate of 5.5% for 30 years. The terms of theloaninclude an annual reset date at the beginning of each year. Theborrowerexpects that at the beginning of year 2 the interest rate willincrease to6.5%.a. Assuming this is a fully amortizing loan, what will be themonthlypayments during year 1? b. Based on (a) what will be the loan balance at the end of year1? c. If the interest rate at the beginning of year 2 is 6.5%, whatwill be themonthly interest payments during year 2? d. What will be the loan balance at the end of year 2? e. What would be the monthly payments in year 1 if they are tobeinterest only?