Question
Mr. Kim made a Price Level Adjusted Mortgage (PLAM) of $180,000 loan for 15 years. Nominal interest rate is equal to 12% and payments are
Mr. Kim made a Price Level Adjusted Mortgage (PLAM) of $180,000 loan for 15 years. Nominal interest rate is equal to 12% and payments are made monthly. The lender and borrower agreed that loan balance will be indexed to the CPI (Consumer Price Index) and adjusted annually. If the CPI is equal to 10% at the end of the first year, what is the value of the each monthly payments during the second year?
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Public Finance A Contemporary Application Of Theory To Policy
Authors: David N. Hyman
5th Edition
0030113172, 978-0030113178
