What is the amount of the first annual payment

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1. Assume you just deposited $1,100 into a bank account. The current real interest rate is 2?%, and inflation is expected to be 5?% over the next year. What nominal rate would you require from the bank over the next? year?

2. Hometown Builders is borrowing $195,000 today for four years. The loan is an interest-only loan with an APR of 7.65 percent. Payments are to be made annually. What is the amount of the first annual payment?

Reference no: EM131973223

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