PLAM A fully amortized mortgage is granted for $104,000 @ 30 years at an interest rate of 5.5%. The loan balance will be 'indexed' to the Consumer Price Index (CPI) and adjusted annually.

a. Calculate the initial monthly payments. 5 points b. If the CPI increased during the first year of the loan so you must "index" the balance by 6% + 1 (that is, multiply by 1.06), what is the amount of the monthly payments in the second year? 5 points