What is the approximate real interest rate

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(a) What is the future value of $1200 invested for 3 years at an interest rate of 6% p.a., compounded quarterly?

(b) What is the Effective Annual Rate in part (a)?

(c) What is the present value of an annuity consisting of payments of $265 every six months for 12 years, if the discount rate is 9% p.a., compounded semi- annually?

(d) You deposit $100 into a bank account for 9 years, at the end of which time the money has grown to $183.85. What is the annual interest rate on the account?

(e) If the nominal rate of interest is 11% and the expected inflation rate is 8%, what is the approximate real interest rate?

Reference no: EM131848071

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