If the market interest rate is 12% per year and the inflation rate is 5% per year,
Question:
If the market interest rate is 12% per year and the inflation rate is 5% per year, the number of future dollars in year 7 that will be equivalent to $2000 now is best represented by the equation:
(a) Future dollar amount = 2000(1 + 0.198)7
(b) Future dollar amount = 2000/(1.198)7
(c) Future dollar amount = 2000(1 + 0.12)7
(d) Future dollar amount = 2000/(1.07)7
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