Price Level Adjusted Mortgage (PLAM) of $55,000 loan is made for 30 years. Nominal interest rate is equal to 10% 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 12% during the first year and 15% during the second year, what is the value of the each monthly payment during the third year?
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
Price Level Adjusted Mortgage (PLAM) of $55,000 loan is made for 30 years. Nominal interest rate is equal to 10% 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 12% during the first year and 15% during the second year, what is the value of the each monthly payment during the third year? (Answer is rounded)
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