Homework Help: Math

Posted by Katie on Wednesday, May 11, 2011 at 3:13pm.

The nominal rate of interest is 8% and the rate of inflation is 5%. A single deposit is invested for 10 years. Let:

A= value of the investment at the end of 10 years measured in "constant dollars," i.e. in dollars valued at time 0.
B= value of the investment at the end of 10 years computed at the real rate of interest.

Find the ratio A/B.

No one has answered this question yet.

Answer this Question

Related Questions

Economics - The formula given was: (real rate of interest) = (nominal rate of ...
Economics - If the velocity of circulation is constant, real GDP is growing at 3...
Macroeconomics - The annual nominal rate of interest on a bank certificate of ...
international economic - 2.) This question uses the general monetary model, in ...
Determinants of Interest Rates - If the rate of inflation is 5%, what nominal ...
math - Please someone show me how to work this one out? Suppose Caroline is a ...
economics - Suppose Caroline is a cinephile and buys only movie tickets. ...
Math - If the Risk Free Rate is 2% and the expected inflation rate is 3%, what ...
corporate finance - If the rate of inflation is 5%, what nominal interest rate ...
business - For a given nominal interest rate, an unexpectedly low inflation rate...

For Further Reading

First Name:
School Subject:
Answer: