Question 3. The installation costs of a battery system in a home were $5,000 in 2017. Assume that the life of the system is 3 years. The real internal rate of return on this investment is 10% and the average inflation is 3%. Find its equivalent future worth at 2020 (in terms of actual and real dollars).
Question 3. The installation costs of a battery system in a home were $5,000 in 2017. Assume that the life of the system is 3 years. The real internal rate of return on this investment is 10% and the average inflation is 3%. Find its equivalent future worth at 2020 (in terms of actual and real dollars).
Chapter1: Making Economics Decisions
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![Question 3.
The installation costs of a battery system in a home were $5,000 in 2017. Assume that
the life of the system is 3 years. The real internal rate of return on this investment is 10% and the
average inflation is 3%. Find its equivalent future worth at 2020 (in terms of actual and real.
dollars).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff15af996-9f6a-47f9-972f-db5647a8db7b%2F423857b1-c066-49e8-8c55-5f251af72a2e%2Filkzd5t_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question 3.
The installation costs of a battery system in a home were $5,000 in 2017. Assume that
the life of the system is 3 years. The real internal rate of return on this investment is 10% and the
average inflation is 3%. Find its equivalent future worth at 2020 (in terms of actual and real.
dollars).
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