If an ARM Index Increased 15%,the Negative Amortization on a Loan

If an ARM index increased 15%,the negative amortization on a loan with a 5% annual payment cap is calculated by:

A) using the same payment as last year and deducting 5% from the principal balance.
B) increasing the payment by 5%.
C) totaling the difference between the payment as if no cap existed and the 5% capped payment.
D) compounding the difference between the payment as if no cap existed and the 5% capped payments.