We suggest you invest in a 3-year progressive rate investment certificate. The interest rate attached to it
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Question:
We suggest you invest in a 3-year progressive rate investment certificate. The interest rate attached to it (compounded annually) increases each year. The interest rates offered are as follows, for each year:
- Year 1: rate of 5.00%;
- Year 2: rate of 6.00%;
- Year 3: rate of 7.00%.
Assuming an average annual inflation rate of 2% over the next 10 years, what will be the average real annual return after three years associated with this investment?
Related Book For
Dynamic Business Law
ISBN: 9781260733976
6th Edition
Authors: Nancy Kubasek, M. Neil Browne, Daniel Herron, Lucien Dhooge, Linda Barkacs
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