Question
If you had $90 today and needed $100 in a year from now, what is the rate of return you would need to turn $90
If you had $90 today and needed $100 in a year from now, what is the rate of return you would need to turn $90 into $100? (Please explain)
a) The rate of return is not possible to calculate.
b) The rate of return would depend on when during the year the $90 was invested.
c) You would need a rate of return of 10% because the difference between $90 today and $100 in one year from now is $10.
d) You would need a generate an 11.11% rate of return on the $90 to earn $100 in a year from now.
e) You would need to generate $12 because of inflation.
f) Only (c) and (e).
g) None of the above
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