The Fisher effect says that _______ . Group of answer choices the nominal interest rate adjusts one for one with the inflation r
1 answer:
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Answer:
investment 10 years from now is $1,238,000 .
Explanation:
given data
sum = $500,000
rate = 12% =0.12
total time = 10 year
solution
as present value After 2 years from now is $500,000
so time period is now = 8 year ( 10 - 2 )
so we apply future value formula that is
Future value = present value × ............1
put here value we get
Future value = $500,000 ×
Future value = $500,000 × 2.476
Future value = $1,238,000
so investment 10 years from now is $1,238,000 .