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7. Consider a price level adjusted mortgage with the following features: Mortgage Amount $400,000 Mortgage Term 30 years, monthly payments Current Real Rate 2.0% Inflation

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7. Consider a price level adjusted mortgage with the following features: Mortgage Amount $400,000 Mortgage Term 30 years, monthly payments Current Real Rate 2.0% Inflation for years 1-3 3%, 1%, and 2% Mortgage Payments are adjusted annually What are the monthly payments for each of the first 3 years? Consider the PLAM in question #7 above. If the lender charges 3 points, and the mortgage is repaid at the end of year 3 (month 36), what is the effective cost (IRR) of this loan? 7. Consider a price level adjusted mortgage with the following features: Mortgage Amount $400,000 Mortgage Term 30 years, monthly payments Current Real Rate 2.0% Inflation for years 1-3 3%, 1%, and 2% Mortgage Payments are adjusted annually What are the monthly payments for each of the first 3 years? Consider the PLAM in question #7 above. If the lender charges 3 points, and the mortgage is repaid at the end of year 3 (month 36), what is the effective cost (IRR) of this loan

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