You are a new loan officer with Alpha Mortgage, and the manager of the loan department has just presented a problem to you. He is unable to complete the APR calculation on an adjustable-rate mortgage that a borrower applied for yesterday. The loan features initial teaser interest rate of 5 percent. The current fully indexed rate on the loan is 7.1 percent. Two discount points have been paid by the borrower. Interest rate adjustments are annual, and the loan will have a 1 percent annual interest cap and 3 percent lifetime cap. The mortgage amount desired by the borrower is $97,500 for a 30-year term.

Required:
Determine the APR for the loan.