The borrowed money at a fixed rate of 5% over 30 years to purchase a house
1. If the rate of inlation is 1%, what the real interest rate of the loan?
2. If the rate of inflation is 4%, what is the real interest rate of the loan? What if the rate was 10%
3. which one of the inflation rates is best for you in terms of the loan repayments? why?
4. Which one of the inflation rates is best for the bank? Why?