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Sagot :
The amount of money that I would have in the bank account at the end of one year is $1,100.
The real interest rate I would expect to earn on the deposit is 6%.
If I am saving for a gaming computer, at the end of next year I would have enough money.
What is the value of the money by next year?
The formula that can be used to determine the money in my bank account next year is:
FV = P (1 + r)^n
Where:
FV = Future value
P = Present value
R = interest rate
N = number of years
1000 x (1.1)^1 = $1,100
What is the real interest rate?
The real interest rate is the nominal interest rate less inflation rate.
The real interest rate = 10% - 4% = 6%
To learn more about future value, please check: https://brainly.com/question/18760477
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