Insteadofbuyingamotorcyclethisyear,youdecidedtopostponeitforanother3yearsanddeposityour money worth PhP 90,000 to a bank offering 1.25% interest compounded monthly. Using the compound interest formula, your money would amount to PhP 93,437.26 after 3 years. Due to inflation (assuming 2.5% inflation rate), products and services worth PhP 90,000 today will be worth higher in 3 years. Specifically, it will be worth PhP 96,920.16. Which of the following conclusion is correct? a. You have gained purchasing power. b. Inflation will outpace the interest rate in your savings account by PhP 3,482.90. c. Inflation will outpace the interest rate in your savings account by PhP 6,920.16. d. Botha&b
Insteadofbuyingamotorcyclethisyear,youdecidedtopostponeitforanother3yearsanddeposityour money worth PhP 90,000 to a bank offering 1.25% interest compounded monthly. Using the compound interest formula, your money would amount to PhP 93,437.26 after 3 years. Due to inflation (assuming 2.5% inflation rate), products and services worth PhP 90,000 today will be worth higher in 3 years. Specifically, it will be worth PhP 96,920.16. Which of the following conclusion is correct? a. You have gained purchasing power. b. Inflation will outpace the interest rate in your savings account by PhP 3,482.90. c. Inflation will outpace the interest rate in your savings account by PhP 6,920.16. d. Botha&b
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 2STP
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Insteadofbuyingamotorcyclethisyear,youdecidedtopostponeitforanother3yearsanddeposityour money worth PhP 90,000 to a bank offering 1.25% interest compounded monthly. Using the compound interest formula, your money would amount to PhP 93,437.26 after 3 years. Due to inflation (assuming 2.5% inflation rate), products and services worth PhP 90,000 today will be worth higher in 3 years. Specifically, it will be worth PhP 96,920.16. Which of the following conclusion is correct?
a. You have gained purchasing power .
b. Inflation will outpace the interest rate in your savings account by PhP 3,482.90.
c. Inflation will outpace the interest rate in your savings account by PhP 6,920.16.
d. Botha&b
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