A loan of $100,000 is taken out which requires an annual interest payment of 6% of the outstanding principal. If no principal payments are made over time and inflation is 3.1% per year, the payment at the end of year four is:
A real dollar cash flow of $6,000 and an actual dollar cash flow of $5,310.
An actual dollar cash flow of $6,000 and a real dollar cash flow of $5,310.
An actual dollar cash flow of $6,779 and a real dollar cash flow of $6,000.
A real dollar cash flow of $5,310 and an actual dollar cash flow of $6,779.