About the calculating investment returns

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Calculating Investment Returns

You bought one of Rocky Mountain Manufacturing Co.’s 9 percent coupon bonds one year ago for $1,052.30. These bonds make annual payments and mature seven years from now. Suppose that you decide to sell your bonds today, when the required return on the bonds is 8.50 percent.

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If the inflation rate was 3.9 percent over the past year, what would be your total real return on investment? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Total real return on investment %

Reference no: EM131346152

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