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Question 9 A price level adjusted mortgage (PLAM) is made with the following terms: Amount=95000, Initial interest rate=4%, Term=30 yrs, Points = 6%. Payments are
Question 9
A price level adjusted mortgage (PLAM) is made with the following terms:
Amount=95000, Initial interest rate=4%, Term=30 yrs, Points = 6%.
Payments are to be adjusted at the beginning of each year.
Assuming inflation is expected to be 6% per year for the next five years, what is the payment
at the beginning of year 3?
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