Amortization, Loan & Inflation Suppose you take out a $100,000, 20- year mortgage loan to purchase a condo. The interest rate is 6%. Assume you make payments on the loan annually at the end of each...


Amortization, Loan & Inflation
Suppose you take out a $100,000, 20- year mortgage loan to purchase a condo. The interest rate is 6%. Assume you make payments on the loan annually at the end of each year.
a. What fraction of the initial loan payment is interest?
b. What fraction of the initial loan is amortized?

c. If the inflation rate is 2%, what are the real values of the first& last (year-end) payments?



Jun 10, 2022
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