9.4 (LG 9.2, 9.3, 9.4) An investment pays $10 000 in five years. a. If inflation is 10 percent per year, what is the real value of the $10 000 in today's dollars? b. If inflation is 10 percent and the real MARR is 10 percent, what is the present worth? c. What current dollar MARR is equivalent to a 10 percent real MARR when inflation is 10 percent? d. Compute the present worth using the current dollar MARR from part (c).
9.4 (LG 9.2, 9.3, 9.4) An investment pays $10 000 in five years. a. If inflation is 10 percent per year, what is the real value of the $10 000 in today's dollars? b. If inflation is 10 percent and the real MARR is 10 percent, what is the present worth? c. What current dollar MARR is equivalent to a 10 percent real MARR when inflation is 10 percent? d. Compute the present worth using the current dollar MARR from part (c).
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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the answer to this question is Q9.4= a=$6209, b=$3855, c=21%, d=$3870.40,
we just need to find how we get that answer for this question, please help NO EXCEL
Transcribed Image Text:9.4 (LG 9.2, 9.3, 9.4) An investment pays $10 000 in five years.
a. If inflation is 10 percent per year, what is the real value of the $10 000 in
today's dollars?
b. If inflation is 10 percent and the real MARR is 10 percent, what is the present
worth?
c. What current dollar MARR is equivalent to a 10 percent real MARR when
inflation is 10 percent?
d. Compute the present worth using the current dollar MARR from part (c).
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