The money from your bank account

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Assume you just deposited S1,000 into a bank account. The current real interest rate is 2% and inflation is expected to be 6% over the next year. What nominal interest rate would you require from the bank over the next year? How much money will you have at the end of one year? If you are saving to buy a stereo that currently sells for S1,050, will you have enough to buy it with the money from your bank account?

Reference no: EM131849244

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