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2. (4 points) A company has $50,000 to invest right now (time 0) in an investment account that earns 8% interest per year. The company
2. (4 points) A company has $50,000 to invest right now (time 0) in an investment account that earns 8% interest per year. The company would like to use the investment for a large purchase in 15 years. The inflation rate is expected to be 3.5% per year over the 15-year period. a. Determine the combined interest rate, ic, over the 15-year period. b. What is the actual dollar (A$) value of the future amount in the account at the end of 15 years? c. What is the real dollar (R$) value of the future amount in the account at the end of 15 years? 2. (4 points) A company has $50,000 to invest right now (time 0) in an investment account that earns 8% interest per year. The company would like to use the investment for a large purchase in 15 years. The inflation rate is expected to be 3.5% per year over the 15-year period. a. Determine the combined interest rate, ic, over the 15-year period. b. What is the actual dollar (A$) value of the future amount in the account at the end of 15 years? c. What is the real dollar (R$) value of the future amount in the account at the end of 15 years
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