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Vivian and lan each receive $40,000 from their great-aunt. Vivian is worried about inflation over the next 9 years, and decides to place her money
Vivian and lan each receive $40,000 from their great-aunt. Vivian is worried about inflation over the next 9 years, and decides to place her money into an inflation protected account earning a real interest of 4.4% per annum compounded quarterly On the other hand, lan thinks the inflation rate will be low over the next 9 years, so decides to place his money into a regular account earning interest at 8.3% compounded monthly If the actual annual effective rate of inflation turns out to be 6%, calculate the ratio of Vivian's purchasing power to lan's purchasing power. Answer to 3 decimal places. What would the annual effective rate of inflation need to be for the purchasing powers to be equal? Answer as a decimal to 4 places Vivian and lan each receive $40,000 from their great-aunt. Vivian is worried about inflation over the next 9 years, and decides to place her money into an inflation protected account earning a real interest of 4.4% per annum compounded quarterly On the other hand, lan thinks the inflation rate will be low over the next 9 years, so decides to place his money into a regular account earning interest at 8.3% compounded monthly If the actual annual effective rate of inflation turns out to be 6%, calculate the ratio of Vivian's purchasing power to lan's purchasing power. Answer to 3 decimal places. What would the annual effective rate of inflation need to be for the purchasing powers to be equal? Answer as a decimal to 4 places
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