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The inflated interest rate is 10% per year. The inflation rate is 6% per year. a) How much money will be accumulated in the account
The inflated interest rate is 10% per year. The inflation rate is 6% per year. a) How much money will be accumulated in the account in 5 years if you deposit 40,000 today? b) In terms of today's dollars what is the purchasing power of the accumulated amount? c) What is the real rate of return that is made on the account? d) Assume that you have an investment alternative to the deposit account. What is the discounted payback period if you invest 40.000 to a project instead of the deposit account today and start to receive annual payments of 10.000 at the end of each year
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