You invested 10000 on january 1 2014 at 7 percent interest, Ask an Expert

Economics

You invested $10,000 on January 1, 2014, at 7 percent interest compounded annually. You have not touched the investment since that date. You are planning to take your money and close out the investment on January 1,2024.

a. If average in?ation is 3.7 percent, what has been your ‘‘real’’ annual interest rate?

b. At the time you originally invested, there was a boat you admired costing $8,000. Over the years, boats are in?ating at a rate of 7 percent. You were also interested in a marine navigation system costing $4,000; similar systems are dropping in price at a 2 percent rate. If you decide to buy one of each when you close out the account, how much will the purchases cost you?

c. How much money will you have left over (or be short) after your purchases?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91843990

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