"You have a $10,000 monthly loan payment. If annual inflation is 5% (compounded monthly), what is the constant dollar amount of this payment in month 49? Recall that since the annual inflation rate is compounded monthly and payments are made monthly, you can calculate the effective monthly inflation rate simply by dividing the annual inflation rate by 12. "

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Asked Dec 5, 2019
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"You have a $10,000 monthly loan payment. If annual inflation is 5% (compounded monthly), what is the constant dollar amount of this payment in month 49? Recall that since the annual inflation rate is compounded monthly and payments are made monthly, you can calculate the effective monthly inflation rate simply by dividing the annual inflation rate by 12. "

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Inflation is the rise in the prices of goods and services over a period of time. The unit of currency which buys a particular ba...

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