Calculator Problem – 03/28/2011

If you have a 30-year fixed loan of $100,000 at 4.5% interest and we experience 11% inflation over the next 30 years, what is the effective cost of the loan today?  

(The answer will be posted with the new calculator problem in 2 weeks.  Or if you can’t wait that long, you can go to http://www.facebook.com/pages/Gary-Johnston-Seminars/111368472221424 for the answer.)

Answer to 03-14-2011 problem:

(N=180, I=6, PV=190,000, FV=0) PMT = 1603.33
Amortize for payments 1-85
Balance = $121,012.07