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You want to have $6 million in real dollars in an account when you retire in 40 years. The nominal return on your investment is
You want to have $6 million in real dollars in an account when you retire in 40 years. The nominal return on your investment is 9 percent and the inflation rate is 5.4 percent. What real amount must you deposit each year to achieve your goal? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Suppose the real rate is 3.7 percent and the inflation rate is 5.3 percent. What rate would you expect to see on a Treasury bill? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Treasury bills are currently paying 6 percent and the inflation rate is 3.1 percent. a. What is the approximate real rate of interest? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the exact real rate? (Do not round intermediate calculations and enter you answer as a percent rounded to 2 decimal places, e.g., 32.16.) Locate the Treasury issue in Figure 7.5 maturing in August 2042. Assume a par value of $10,000. a. What is its coupon rate? (Enter your answer as a percent rounded to 3 decimal places, e.g., 32.161.) b. What is its bid price in dollars? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What was the previous day's asked price in dollars? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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