A bank makes a 30 year Fully Amortizing FRM for $2,000,000 at an annual interest rate of 4.125% compounded monthly, with monthly payments.Suppose inflation is 2% per year, compounded monthly. What is the real value of the 20th payment? O A. $9,375.48 B. $9,050.06 OC $9,692.99 OD. $6,523.11
A bank makes a 30 year Fully Amortizing FRM for $2,000,000 at an annual interest rate of 4.125% compounded monthly, with monthly payments.Suppose inflation is 2% per year, compounded monthly. What is the real value of the 20th payment? O A. $9,375.48 B. $9,050.06 OC $9,692.99 OD. $6,523.11
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 22PROB
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![QUESTION 7
A bank makes a 30 year Fully Amortizing FRM for $2,000,000 at an annual interest rate of 4.125% compounded monthly, with monthly payments.Suppose inflation
is 2% per year, compounded monthly. What is the real value of the 20th payment?
O A. $9,375.48
O B. $9,050.06
OC. $9,692.99
OD. $6,523.11](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fecfe598f-5115-495a-994e-2672f72d790b%2Fafcbbdb8-2a7e-43a0-81fb-81753a822c17%2F40n5s5l_processed.jpeg&w=3840&q=75)
Transcribed Image Text:QUESTION 7
A bank makes a 30 year Fully Amortizing FRM for $2,000,000 at an annual interest rate of 4.125% compounded monthly, with monthly payments.Suppose inflation
is 2% per year, compounded monthly. What is the real value of the 20th payment?
O A. $9,375.48
O B. $9,050.06
OC. $9,692.99
OD. $6,523.11
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