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Future inflation forecasts have been issued for the next 15 years. General price inflation is estimated to be 5% for the next five years, 3.8%
Future inflation forecasts have been issued for the next 15 years. General price inflation is estimated to be 5% for the next five years, 3.8% in the five years after that, and 3% in the following five years. Suppose you invest $10,000 today and will earn 4.2% interest per year, compounding the interest annually for those 15 years. (a) How much money will be in your investment account in 15 years, rounded to the nearest dollar? (b) What will the real value of that investment be in 15 years, adjusting for the nasty bite of inflation? (c) What will the real average annual growth rate of your investment be, over the 15 years (rounded to one decimal place)
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