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You are planning to invest $2,500 today for three years at a nominal interest rate of 9 percent with annual compounding. a. What would be
You are planning to invest $2,500 today for three years at a nominal interest rate of 9 percent with annual compounding.
- a. What would be the future value (FV) of your investment?
- b. Now assume that inflation is expected to be 3 percent per year over the same three-year period. What would be the investments FV in terms of purchasing power?
- c. What would be the investments FV in terms of purchasing power if inflation occurs at a 9 percent annual rate?
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Financial Management Core Concepts
Authors: Raymond M Brooks
3rd edition
133866696, 978-0133866698
