Inflation in the economy

As the US economy of the early 1980's revealed, inflation can wreak havoc on financial markets and general economic prosperity. Moreover, inflationary expectations can erode bond prices profoundly, thereby sending yields soaring. As a result, defending against inflation has become the battle cry of the Federal Reserve through the last five presidential administrations. On this front, the Fed has won both the battle and the war. Today, 8 of the 16 components of the consumer price index have turned negative, representing the highest percentage of declining sub-sectors since 1955. In addition, the personal consumption deflator, Fed Chairman Alan Greenspan's inflation gauge of choice, has averaged a mere 1.75% for the past five years. In short, both inflationary expectations and US Treasury yields are at or near forty-year lows, and likely to remain there.

To calculate your monthly payment at 1.95%, you must multiply your loan amount by 3.7. (  100k times 3.7 =$370. principal and interest