Assume that inflation is 2.4% APR, compounded monthly Assume that you are currently a sophomore. You want
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Assume that inflation is 2.4% APR, compounded monthly
Assume that you are currently a sophomore. You want to have $10,000 in savings by the time you graduate on June 15, 2023. Because the economy is about to boom after Covid, you anticipate that you can save at 12% annually, compounded monthly. How much do you need to save each month, starting July 15 2021, to get to $10,000 in nominal terms by June 15, 2023?
b. How much do you need to save if you want $10,000 in real terms?
c. Which of the two answers is larger? Is that what one would expect? Why?
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324597707
12th edition
Authors: Eugene F. Brigham, Joel F. Houston
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