A PLAM loan for 30 years at an annual interest rate of 3% and a balance of $50,000 was made. Suppose inflation increased by 2% over the first year. What is the new loan balance at the end of the first year? O $48,956 O $41,211 O $50,000 O $49,935

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A PLAM loan for 30 years at an annual interest rate of 3% and a balance of $50,000
was made. Suppose inflation increased by 2% over the first year. What is the new loan
balance at the end of the first year?
O $48,956
O $41,211
O $50,000
O $49,935
Transcribed Image Text:A PLAM loan for 30 years at an annual interest rate of 3% and a balance of $50,000 was made. Suppose inflation increased by 2% over the first year. What is the new loan balance at the end of the first year? O $48,956 O $41,211 O $50,000 O $49,935
A borrower takes out a 30-year adjustable rate mortgage loan for $200,000 with
monthly payments. The first two years of the loan have a "teaser" rate of 4 percent,
after that the rate can reset with no payment or interest caps. On the reset date, the
composite rate is 6 percent. What would the Year 3 monthly payment be?
O $955
O $1,186
$1,071
$1,067
Transcribed Image Text:A borrower takes out a 30-year adjustable rate mortgage loan for $200,000 with monthly payments. The first two years of the loan have a "teaser" rate of 4 percent, after that the rate can reset with no payment or interest caps. On the reset date, the composite rate is 6 percent. What would the Year 3 monthly payment be? O $955 O $1,186 $1,071 $1,067
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