5.0 Points
			Serial Annuity
			Please construct an amortization schedule cleaning off a $40 monthly payment over 16 months at rates as show below:
Inflation & Deflation			Build schedule to reflect both inflation and deflation.
Nominal rate	0.0603
Inflation rate	0.035
Real rate	0.0253
Nominal rate
Inflation rate
Real rate
		1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16
	C0	C1	C2	C3	C4	C5	C6	C7	C8	C9	C10	C11	C12	C13	C14	C15	C16
Cash flows	-300	40.00	40.00	40.00	40.00	40.00	40.00	40.00	40.00	40.00	40.00	40.00	40.00	40.00	40.00	40.00	40.00
Formula: single
NPV
	Date	Interest	Pmt	Amt	Balance
	0
	1
	2
	3
	4
	5
	6
	7
	8
	9
	10
	11
	12
	13
	14
	15
	16
Nominal rate	0.0603
Inflation rate	0.035
Real rate
Nominal rate
Inflation rate
Real rate
					Rising Payments
		1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16
	C0	C1	C2	C3	C4	C5	C6	C7	C8	C9	C10	C11	C12	C13	C14	C15	C16
Cash flows	-300
Formula: single
NPV
IRR
		First Pmt =	.=Level * (1+ inflation)
	Date	Interest	Pmt	Amt	Balance
	0
	1
	2
	3
	4
	5
	6
	7
	8
	9
	10
	11
	12
	13
	14
	15
	16