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1. Your wealthy uncle gave you $100,000 in stocks on January 1, 2002. If the value of your stocks increases at 10% a year, in how many years will you have $200,000? (use the rule of 70)

1. Your wealthy uncle gave you $100,000 in stocks on January 1, 2002. If the value of your stocks increases at 10% a year, in how many years will you have $200,000? (use the rule of 70)

Brief Principles of Macroeconomics (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter12: Money Growth And Intlation
Section: Chapter Questions
Problem 6PA
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1. Your wealthy uncle gave you $100,000 in stocks on January 1, 2002. If the value of your stocks increases at 10% a year, in how many years will you have $200,000? (use the rule of 70) 2. Your boss gave you a raise of 2% during a year in which inflation increased by 4%. IN percentage terms, what happened to your real income? 3. The nominal interest rate is 8% and the inflation rate is 6%, what is the real rate of interest? 4. If the real rate of interest is 2%, and the expected rate of inflation is 3%, then the nominal rate of interest is:
Transcribed Image Text:1. Your wealthy uncle gave you $100,000 in stocks on January 1, 2002. If the value of your stocks increases at 10% a year, in how many years will you have $200,000? (use the rule of 70) 2. Your boss gave you a raise of 2% during a year in which inflation increased by 4%. IN percentage terms, what happened to your real income? 3. The nominal interest rate is 8% and the inflation rate is 6%, what is the real rate of interest? 4. If the real rate of interest is 2%, and the expected rate of inflation is 3%, then the nominal rate of interest is:
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