Based on comparison of two rates and current inflation rate

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Reference no: EM131981152

Assume inflation is 0.24% per month. Would you rather earn a nominal return of 0.74% per? month, compounded? monthly, or a real return of 6.57% APR, compounded? annually?

?(?Note: Be careful not to round any intermediate steps less than six decimal? places.)

The annual rate for the nominal return of 0.74% per month is ___.

?(Type your answer in decimal format. Round to six decimal? places.)

The nominal annual rate for the real return of 6.57% APR is ___.

?(Type your answer in decimal format. Round to six decimal? places.)

Based on a comparison of the two rates, and the current inflation rate, you would prefer the _____ option over the _____ option.

Reference no: EM131981152

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