Suppose you have $200,000 in a bank term account. You earn 5% interest per annum from this account. You anticipate that the inflation rate will be 4% during the year. However, the actual inflation rate for the year is 6%. Calculate the impact of inflation on the bank term deposit.
Suppose you have $200,000 in a bank term account. You earn 5% interest per annum from this account. You anticipate that the inflation rate will be 4% during the year. However, the actual inflation rate for the year is 6%. Calculate the impact of inflation on the bank term deposit.
Chapter13: Inflation
Section: Chapter Questions
Problem 8SQP
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Suppose you have $200,000 in a bank term account. You earn 5% interest per annum from this account.
You anticipate that the inflation rate will be 4% during the year. However, the actual inflation rate for the year is 6%.
Calculate the impact of inflation on the bank term deposit.
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