1- if you expect to receive 100,000 exactly five years from now, what do you expect...
1- if you expect to receive 100,000 exactly five years from now, what do you expect its purchasing power to be if you expect the nominal rate to be 6.0% every year and expect inflation to be 2.0% every year?
Homework Answers
| Nominal value = real value*(1+ inflation rate)^time |
| 100000 = real value*(1+0.02)^5 |
| real value = 90573.08 |
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