Question
At the beginning of 2018 you deposit 1000 for 5 years compounded QUARTERLY, at an annual rate of 4%. A) Please calculate the annual EFFECTIVE
At the beginning of 2018 you deposit 1000 for 5 years compounded QUARTERLY, at an annual rate of 4%.
A) Please calculate the annual EFFECTIVE rate of your investment;
B) Calculate the average rate of inflation yearly (use Geomean and mathematical root)
C) Which annual rate is higher: your effective interest or inflation?
D) What will be the effective rate adjusted to average inflation rate?
Inflation Interest rate 2018 2% 4% 2019 7% 4% 2020 4% 4% 2021 6% 4% 2022 Total %, for five years: 3% 4%
Step by Step Solution
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Step: 1
A Calculate the annual effective rate of your investment Given Principal amount P 1000 Annual nomina...
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
