From 2021 to 2030, annual inflation rate is expected to be 10% per year. Farmbank has...

 

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From 2021 to 2030, annual inflation rate is expected to be 10% per year. Farmbank has a deposit account which pays an interest at a real 4% per year. a) How much money should you place into this deposit account today to accumulate 50.000 in January 2028: b) In terms of today's dollars what is the purchasing power of the accumulated amount 50.000 (accumulated in Jan-2028)? c) Another bank (Fibabank) offers to pay the same amount (50.000 ₺) in January 2028, if you place 17.691 ₺ today. What is the real interest rate offered by Fibabank? d) The number of future dollars (in Jan-2028) that will have the same purchasing power as 17.691 today in Fibabank? From 2021 to 2030, annual inflation rate is expected to be 10% per year. Farmbank has a deposit account which pays an interest at a real 4% per year. a) How much money should you place into this deposit account today to accumulate 50.000 in January 2028: b) In terms of today's dollars what is the purchasing power of the accumulated amount 50.000 (accumulated in Jan-2028)? c) Another bank (Fibabank) offers to pay the same amount (50.000 ₺) in January 2028, if you place 17.691 ₺ today. What is the real interest rate offered by Fibabank? d) The number of future dollars (in Jan-2028) that will have the same purchasing power as 17.691 today in Fibabank?

Answer rating: 100% (QA)

a To calculate how much money you should place into the deposit account today to accumulate 50000 in January 2028 we need to account for the effects o... View the full answer