Hi, could some one check this;
You are being offered a choice of $10.00 today or $20.00 in one year. If the rate of inflation is expected to be 5% and the nominal interest rate is 3% which options should you choose?
FV of 10
10(1.03)/1.05=9.81
so go with the $20 in a year.
I think its wrong...
You are being offered a choice of $10.00 today or $20.00 in one year. If the rate of inflation is expected to be 5% and the nominal interest rate is 3% which options should you choose?
FV of 10
10(1.03)/1.05=9.81
so go with the $20 in a year.
I think its wrong...