Discover a world of knowledge at Westonci.ca, where experts and enthusiasts come together to answer your questions. Get immediate and reliable solutions to your questions from a knowledgeable community of professionals on our platform. Our platform provides a seamless experience for finding reliable answers from a network of experienced professionals.
Sagot :
Based on the information given, the real interest rate that Maria's total real return over the 3-year period will be 0.94%.
Inflation rate in 2012 will be:
= (105/100) - 1 = 5%
Inflation rate in 2013 will be:
= (110/105) - 1 = 4.76%
Inflation rate in 2014 will be:
= (118/100) - 1 = 7.27%
The average inflation rate for three years will be 5.67%.
The real return for 2012 will be:
= (1 + 0.06) / (1 + 0.05) - 1
= 0.95%
The real return for 2013 will be:
= (1 + 0.06) / (1 + 0.0476) - 1
= 1.18%
The real return for 2014 will be:
= (1 + 0.06) / (1 + 0.0727) - 1
= -1.18%
Therefore, the rate of return over the three years period will be:
= (1 + 0.095) × (1 + 0.118) × (1 - 0.118) - 1
= 0.94%
In conclusion, the correct option is 0.94%.
Read related link on:
https://brainly.com/question/25354941
Thanks for using our service. We aim to provide the most accurate answers for all your queries. Visit us again for more insights. Thank you for visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. Thank you for choosing Westonci.ca as your information source. We look forward to your next visit.
