Your mortgage is an ARM with a 1 year adjustment interval, 4% margin, and a 2% periodic cap. Your initial APR on this loan was 4.5%. Over the last 5 years the market rates of interest have risen dramatically

The current interest rate index for your loan is 8.5 %. What APR are your monthly payments being calculated on today?
A) 4.5%
B) 8.5%
C) 10.5%
D) 12.5%

Answer: D