An investment will pay you $29,900 in 11 years. The stated interest rate is 9% (APR)....

Question

Question

Answer 1

Answer #1

Q1) For continuously compounding the formula for FV is as follows:

FY =PY XE

29900 = PV X 0.09x11

PV = 11, 110.14

Q2) Nominal rate = Real rate + inflation

4= 1+ inflation

Inflation =3%

Answer 2

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