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A bond pays $12,000 per year for the next 10 years. The bond costs $108,000 now. Inflation is expected to be 5 percent over the
A bond pays $12,000 per year for the next 10 years. The bond costs $108,000 now. Inflation is expected to be 5 percent over the next 10 years. Answer parts (a) and (b). a. What is the current dollar internal rate of return? Use linear interpolation with X7 = 1.95% and X2 = 2.00% to find your answer. The current dollar internal rate of return is percent. (Type an integer or decimal rounded to two decimal places as needed.) b. What is the real internal rate of return? The real internal rate of return is percent. (Type an integer or decimal rounded to two decimal places as needed.)
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