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1. Suppose you require 2% for real rate if you lend for one year. You require 6% for inflation rate. Assuming you lend $10 million
1. Suppose you require 2% for real rate if you lend for one year. You require 6% for inflation rate. Assuming you lend $10 million to the US Government for a year, what is the ending value you will get at the end of first year? Suppose you also require compensation for inflation for the interest you get for postponing consumption. a. 10,000,000 b. 10,200,000 c. 10,600,000 d. 10,800,000 e. 10,812,000
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