1. Your wealthy uncle gave you $100,000 in stocks on January 1, 2002. If the value of your stocks increases at 10% a year, in howmany years will you have $200,000? (use the rule of 70)2. Your boss gave you a raise of 2% during a year in which inflation increased by 4%. IN percentage terms, what happened to yourreal income?3. The nominal interest rate is 8% and the inflation rate is 6%, what is the real rate of interest?4. If the real rate of interest is 2%, and the expected rate of inflation is 3%, then the nominal rate of interest is:

Given: Amount in stocks=$100000 Increase in Stock=10% To find: Number of years Note: Due to multiple…

Answered: 1. Your wealthy uncle gave you $100,000…

1. Your wealthy uncle gave you $100,000 in stocks on January 1, 2002. If the value of your stocks increases at 10% a year, in how many years will you have $200,000? (use the rule of 70)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1. Your wealthy uncle gave you $100,000 in stocks on January 1, 2002. If the value of your stocks increases at 10% a year, in how
many years will you have $200,000? (use the rule of 70)
2. Your boss gave you a raise of 2% during a year in which inflation increased by 4%. IN percentage terms, what happened to your
real income?
3. The nominal interest rate is 8% and the inflation rate is 6%, what is the real rate of interest?
4. If the real rate of interest is 2%, and the expected rate of inflation is 3%, then the nominal rate of interest is:

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