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Question: Assume you will be borrowing $250,000 for a home at 6% nominal annual interest, compounded quarterly. You also assume that your income will increase by 2% per year and would like a payment scheme that also grows as your income grows. Assume that each year, you will make equal quarterly payments, but that between years your payments would increase by 2% each year. If you want to pay back this loan in this manner over 20 years, what would the quarterly payment in the first year have to be?

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