You have been offered an opportunity to invest $5,000 at a rate of 10% for the next
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Question:
You have been offered an opportunity to invest $5,000 at a rate of 10% for the next 4 years. You expect inflation to continue at 4% per year over this investment period
Required:
(a) Compute the real interest rate.
(b) Compute the nominal value of the investment at the end of 4 years.
(c) Compute the present value of this investment in real terms
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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