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300 5. The real rate of return on an investment is the annual rate of return after taking into account the impacts of inflation.
300 5. The real rate of return on an investment is the annual rate of return after taking into account the impacts of inflation. It more accurately reflects the purchasing power of your money. You can calculate it using the formula below, where "nominal rate" is the given rate of return. Real Rate of Return= 1+ Nominal Rate 1+ Inflation Rate -1 a. What is the real rate of return on Hadley's investments? Refer back to question 4. b. What is the real rate of return on Hadley's savings? c. How does the graph show the impact of inflation on the value of Hadley's savings over time? d. Question 4 used the equations y = 300 (1.05)* and y = 300(1.01)* to represent Hadley's savings and investment balances over time, respectively. Rewrite these equations to represent their account balances based on their real rate of return.
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