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Olenka [21]
3 years ago
7

Over a 17-year period an investment of $1,475 in common stocks returned an average of 10% in nominal terms and 3% in real terms.

At the end of the 17 years, the portfolio value was:
Business
1 answer:
Roman55 [17]3 years ago
7 0

Answer:

The nominal value at the end of 17 years =  $7,455.34

The real value at the end of 17 years =  $2,437.95

Explanation:

Value at the end of 17 years = present value x (1+ interest rate)^t

The nominal value at the end of 17 years = $1,475 x (1.1)^17 = $7,455.34

The real value at the end of 17 years = $1,475 x (1.03)^17 = $2,437.95

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