How much real purchasing power will you have in thirty years

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Reference no: EM131505684

Question: The U.S. stock market has returned an average of about 9% per year since 1900. This return works out to a real return (i.e., adjusted for inflation) of approximately 6% per year.

a. If you invest $100,000 and you earn 6% a year on it, how much real purchasing power will you have in 30 years?

b. If you invest $5,000 per year for 20 years, how much real purchasing power will you have at the end of 30 years? The interest rate is 6% per year.

Reference no: EM131505684

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