You invested a sum of money that your grandparents gave you six years ago when you graduated from high school. The rate of inflation since then has been 5.2% per year. You almost forgot about this investment until you received a statement in the mail, and you noticed a return of $5,938.11 on your original investment. You calculated that your real rate of return on the initial investment had been 9.8%. What was the size of your original investment?

You invested a sum of money that your grandparents gave you six years ago when you graduated from high school. The rate of inflation since then has been 5.2% per year. You almost forgot about this investment until you received a statement in the mail, and you noticed a return of $5,938.11 on your original investment. You calculated that your real rate of return on the initial investment had been 9.8%. What was the size of your original investment?

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

You invested a sum of money that your grandparents gave you six years ago when you graduated
from high school. The rate of inflation since then has been 5.2% per year. You almost forgot about
this investment until you received a statement in the mail, and you noticed a return of $5,938.11
on your original investment. You calculated that your real rate of return on the initial investment
had been 9.8%. What was the size of your original investment?

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