| Question: |
| 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 of your investment? |
| Answer: |
| b. Now assume that inflation is expected to be 3 percent per year over the same three-year period. What would be the investment’s future value in terms of purchasing power? |
| Answer: |
| c. What would be the investment’s future value in terms of purchasing power if inflation occurs at a 9 percent annual rate? |
| Answer: |
moortgaet
fn2640_week1_lab1.xlsx
