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Problem 1 (2 points) : 1.1 Your rich uncle invested $6,000 in an aggressive (i.e., risky) mutual fund 25 years ago. Much to your uncle's
Problem 1 (2 points) : 1.1 Your rich uncle invested $6,000 in an aggressive (i.e., risky) mutual fund 25 years ago. Much to your uncle's chagrin, the value of his investment declined by 18.0% during the first year and then declined another 18.0% during the second year. But your uncle decided to stick with this mutual fund, reasoning that long-term sustainable growth of the U.S. economy was bound to occur and enhance the value of his mutual fund. 23 more years have passed, and your uncle's cumulative return over the 25-year period is a whopping 635%! If the value of the original investment now is $44,100.00 a. What is the spending power equivalent in terms of real dollars 25 years ago if inflation has averaged 7% per year over the past 25 years? 1 Point $ LATEX You have used 0 of 5 attempts Submit 1.2 b. What is the real compound interest (return) rate earned over the 25-year period? 1 Point % LATEX You have used 0 of 5 attempts Submit
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