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[8] You deposit $ 1000 into a bank account with interest rate i(1) = 6%. The cost of living (inflation) rises 3% per year. (a)

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[8] You deposit $ 1000 into a bank account with interest rate i(1) = 6%. The cost of living (inflation) rises 3% per year. (a) [4] Compute the real rate of return and the purchasing power of this deposit after 10 years. (b) [4] Compute the real after tax interest rate and the purchasing power of this deposit after 10 years if the tax of the earned interest must be paid at the rate of 20%

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