Macy has a 20 year adjustable rate mortgage with a fixed rate for the first 7 years. In the 8th year, the interest rate rises to 6.2%. The remaining balance at the end of the 7th years is $398,381.20. What is the monthly payment in the 8th year?

The answer is indeed 3,725.90. The reason why is because with each adjustment, you take the remaining balance and calculate a fixed rate loan for the remaining time period at the new rate. When you follow that procedure with the data you already have, you get that answer.