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December 20, 2014

December 20, 2014

Posted by **Sally** on Wednesday, February 29, 2012 at 11:25pm.

My answer is this correct:

real interest rate = 6.94%

FV = 1.5 million

N = 40 yrs

pmt = $7,630.72

Real amount each month is $7,630.72

- Math -
**Nick**, Monday, December 3, 2012 at 6:05pmReal rate = 11-3.8

= 7.2%

1,500,000/(1+0.072)^40= 92960.80

To check this is correct you can do:

92960.80*(1+0.072)^40= 1,500,000

- Math -
**n**, Sunday, March 9, 2014 at 11:52pmedfd

- Math -
**Amanda**, Friday, November 21, 2014 at 1:21amyou need to use the Fisher formula to find the real interest rate

1+R=(1+r)x(1+h)

where R=11%nominal rate

h=3.8%inflation

and r= the real interest rate

1+.11=(1+r)x(1+.038)

r=6.94% =I/Y

N=40

PV=0

FV=1.5million

PMT=7630.72

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