Today you borrowed $90,000 from a bank at an interest rate of 10.25%, compounded monthly. You are supposed to repay the loan and its interest charges in equal monthly payments over a 15-year period, with the first payment in a month from now. The estimated annual inflation rate is 6%, compounded monthly. (a) What is the amount of your monthly payments? (b) What is the bank's real effective annual rate of return on this deal after taking inflation into account?

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