What must be the nominal rate of investment

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Reference no: EM132038010

1. Say you own an asset that had a total return last year of 10.9 percent. If the inflation rate last year was 5.3 percent, what was your real return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Real return

2. How much will $25,000 invested at 2.5%, simple interest, be worth in 4 fours? What will it be worth if the interest rate is 5%? Compute for compound interest rate.

3. If investors require a 10 percent real rate of return, and the inflation rate is 8 percent, what must be the nominal rate of investment? Show your work.

Reference no: EM132038010

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