Question
Could you please explain the concept behind this answer. I'm very confused. Thank you. QUestion: With i = 3%. If you plan to consume $1.03
Could you please explain the concept behind this answer. I'm very confused. Thank you.
QUestion: With i = 3%. If you plan to consume $1.03 in year 1, how much will you need to have to keep the same real consumption in year 2? In year 10? In year 20?
Answer
Yr 2 = 1.03*(1+3%)^1 = $1.0609
Yr 10 = 1.03*(1+3%)^9 = $1.3439
Yr 20 = 1.03*(1+3%)^19 = $1.8061
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Case Studies in Finance Managing for Corporate Value Creation
Authors: Robert F. Bruner, Kenneth Eades, Michael Schill
7th edition
007786171X, 77861711, 978-0077861711
