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In 1985, Steven set aside a bag of $4,000 worth of dimes in his attic. He anticipated saving it until he was old enough to
In 1985, Steven set aside a bag of $4,000 worth of dimes in his attic. He anticipated saving it until he was old enough to buy a house. In 2015, Steven is ready to buy a house. From 1985 to 2015, the inflation rate in the United States averaged around 2.5%. During the same time, the Stock Market on average rose by 10% yearly. a) What is the real 1985-dollar equivalent of the $4,000 that Steven has in 2015 (8 points) b) Let's say that instead of hiding the $4,000 worth of dimes, Steven puts that $4,000 in the stock market in 1985. What is the real 1985-dollar equivalent of the $4,000 investment that Steven used for his house in 2015? (8 points) Version B: Last Name H-P EIN 3354 Eng. Econ. Spring 2024 5 c) What should Steven do in 1985 based on your answers in the last 2 parts (hide it or put it in the stock market)? (8 points)
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