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How much money will you have at the end of one year

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Reference no: EM132415573

Problem: Suppose you just deposited $14,000 in your bank savings account. The current real interest rate is 3%, and inflation is expected to be 2.5% over the next year.

Required:

  • What nominal interest rate would you require from the bank over the next year?
  • How much money will you have at the end of one year?
  • If you are saving to buy a car that currently sells for $14,900, will you have enough to buy it?

Reference no: EM132415573

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