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OverLord2011 [107]
3 years ago
14

Assume the real rate of interest is 4.00% and the inflation rate is 4.00%. What is the value today of receiving 11,134.00 in 9.0

0 years
Business
1 answer:
ira [324]3 years ago
8 0

Answer:

FV= $11,134

Explanation:

Giving the following information:

Future value= $11,134

Interest rate= 4%

Inflation rate= 4%

Number of periods= 9 years

<u>The inflation rate provokes the opposite effect of the interest rate. Therefore, if the interest rate and the inflation rate are equal, the value of money through time remains constant.</u>

FV= PV*(1+i)^n

FV= 11,134* (1+0.04-0.04)^9

FV= $11,134

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