Question

Suppose that you borrow ​$17,000 at 18​% compounded monthly over six years. Knowing that the 18​%...

Suppose that you borrow

​$17,000

at

18​%

compounded monthly over

six

years. Knowing that the

18​%

represents the market interest​ rate, you realize that the monthly payment in actual dollars will be

​$387.73.

If the average monthly general inflation rate is expected to be

0.4​%,

determine the equivalent equal monthly payment series in constant dollars.

The equivalent equal monthly payment series in constant dollars is

​$________?

​(Round to the nearest​ dollar.)

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Answer #1

The equivalent equal monthly payment series in constant dollars is : ​$343

The excel calculation and formula used are shown below:

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