Gretchen had $15,000 to invest (Current Year $, year 0), which she invested for 10 years. During this investment period the market rate of return was 12%. After 10 years her investment was worth $37,063 in current year dollars (year 0). What was average inflation that occured during the 10 years investment period? 2.2% 2.4% 3.5% 9.5% 3.8%

Gretchen had $15,000 to invest (Current Year $, year 0), which she invested for 10 years. During this investment period the market rate of return was 12%. After 10 years her investment was worth $37,063 in current year dollars (year 0). What was average inflation that occured during the 10 years investment period? 2.2% 2.4% 3.5% 9.5% 3.8%

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 18PROB

See similar textbooks

Similar questions

Conestoga Plumbing plans to invest in a new pump that is anticipated to provide annual savings for 10 years of $50,000. The pump can be sold at the end of the period for $100,000. What is the present value of the investment in the pump at a 9% interest rate given that savings are realized at year end?
If you invest $15,000 today, how much will you have in (for further instructions on future value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%
If you invest $12,000 today, how much will you have in (for further Instructions on future value in Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at l5% D. 19 years at 18%
The Annual Return is the average Annual Percentage Yield (APY) of an investment over a TT-year time period.Annual Return =(Ending ValueInitial Value)1T−1=(Ending ValueInitial Value)1T-1Kristina pays $5,000 for shares in a new company. She sells the shares 10 years later for $22,500. What was her annual return on this investment? Round your answer to the nearest tenth of a percent.The Annual Return on Kristina's investment is
Maria Quick made an investment of $13, 695.17. From this investment, she will receive $1, 600 annually for the next 15 years starting one year from now. Click here to view the factor table What rate of interest will Maria's investment be earning for her? ( Hint: Use Table 4.) (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answer to 0 decimal places, e. g. 25%.) Rate of interest enter the rate of interest in percentages rounded to o decimal places %
If Karen placed an amount of 9,700 Php in an investment that pays an interest rate of 12%, compounded semi-annually. She wants her money to grow to a total amount of 50,000 Php. What is the rate of interest and initial or principal amount? Then how many times is compounding done in a year?
You bought a painting 5 years ago as an investment. You originally paid $168,000 for it. If you sold it for $342,000, what is your annual return on the investment? Assume annual compounding. (Round to 100th of a percent and enter your answer as a percentage, e.g., 12.34 for 12.34%)
You found an investment opportunity to deposit $15,000 every year for 10 years into an account earning8%. You estimate general inflation to be 3% per year. What is the dollar value of your account at the endof 10 years in today’s real dollars?