A price level adjusted mortgage (PLAM) is made with the following terms: Amount = $95,700 Initial interest rate = 4 perc
Posted: Wed Jul 06, 2022 6:43 pm
A price level adjusted mortgage (PLAM) is made with thefollowing terms:
Amount = $95,700
Initial interest rate = 4 percent
Term = 30 years Points = 6 percent
Payments to be reset at the beginning of each year. Assuminginflation is expected to increase at the rate of 6 percent per yearfor the next five years:
Required:
a. Compute the payments at the beginning of each year (BOY).
b. What is the loan balance at the end of the fifth year?
c. What is the yield to the lender on such a mortgage?
Please SHOW me how this is done. I cannot calculatepayment when inputing these values to Excel. Thankyou!
Amount = $95,700
Initial interest rate = 4 percent
Term = 30 years Points = 6 percent
Payments to be reset at the beginning of each year. Assuminginflation is expected to increase at the rate of 6 percent per yearfor the next five years:
Required:
a. Compute the payments at the beginning of each year (BOY).
b. What is the loan balance at the end of the fifth year?
c. What is the yield to the lender on such a mortgage?
Please SHOW me how this is done. I cannot calculatepayment when inputing these values to Excel. Thankyou!