A PLAM Has the Following Terms: Loan Amount: $118,000,real Interest

A PLAM has the following terms: loan amount: $118,000,real interest rate: 5.50%, 30-year term,2.50 discount points,annual payment adjustments,monthly payments.The payment in year one is $669.99 and the payment in year two is $649.89.What is the inflation rate at the end of year two?

A) -3%
B) 4%
C) 0%
D) 5.50%
E) cannot be determined from the information given