How do you find the yield to the lender for the following problem, using a...
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How do you find the yield to the lender for the following problem, using a financial calculator?
A price level adjusted mortgage (PLAM) is made with the following terms:
$95,000
4% interest rate
30 year term
6% points
Payments to be reset at the beginning of each year. Assuming inflation is expected to increase at the rate of 6 % per year for the next 5 years. The loan balance at the end of the 5th year is $114,987.31 (adjusted for inflation). If solving as a cash flow problems, how to you compute on a finance calculator?
CFo = -89,300
CF1= 5442.48
CF2= 5769.12
CF3 = 6115.20
CF4= 6482.16
CF5= 6871.08 + ?
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