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A price level adjusted mortgage (PLAM) has the following terms: loan amount: $128,000, real interest rate: 5.50%, 30-year term, 2.50 discount points, annual payments adjustments,
A price level adjusted mortgage (PLAM) has the following terms: loan amount: $128,000, real interest rate: 5.50%, 30-year term, 2.50 discount points, annual payments adjustments, monthly payments, observed inflation end of year one (EOY1): -3%, observed inflation end of year two (EOY2): 4%. What is the monthly payment for the third year?
Question options:
| $716 | |
| $715 | |
| $705 | |
| $733 |
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