Assume that you had $130,000 in the bank and you wanted to use it to bum around Europe for as long as you could. If your account earned a 10% annual rate of return, how long would that amount provide you with an annual income of $20,000 per year? About ________ years

How long will it take an account to grow to a million dollars if I deposit $15,000 per year and it grows at 8% per year? (Returns are compounded annually) About ______ years

If the rate of inflation were to fall, all other things remaining constant, the real interest rate on a fixed rate loan that you took out six months ago will:

go up

fall by a rate equal to the inflation rate.

fall by a rate greater than the inflation rate.

fall by a rate lower than the inflation rate.

When a person earns interest income, he does so because he is:

providing a service.

adding value.

taking advantage of market inefficiencies.

stealing.