Jacey obtains a 30-year 6/2 arm at 4% with a 2/6 cap structure in the amount of $224,500. what is the monthly payment during the initial period?

In this case we have an ARM fixed for 6 years and adjust after the initial first 6 years every 2 years after. The basic idea behind a ARM is that the interest changes periodically, but since our ARM is fixed for 6 years, our going to calculate the monthly payment during the initial period using the formula: 
where
is the monthly payment
is the amount
is the interest rate in decimal form 
is the number years

First we need to convert our interest rate of 4% to decimal form by dividing it by 100%:

We also know from our question that  and , so lets replace those values into our formula to find the monthly payment:



We can conclude that the monthly payment during the initial period is $1071.58