Suppose that you have $250 to invest. a). You decide to store the $250 in cash under
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Question:
Suppose that you have $250 to invest.
a). You decide to store the $250 in cash under your mattress. If inflation is 3 percent, what will the real value of that cash be after one year under the mattress?
b). If the nominal interest rate for a typical savings account is 1 percent, how much value did you lose by not depositing the money at the bank?
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