What was the real interest rate earned

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Reference no: EM131096816

In January of 1980, a Troy ounce of gold sold for $850 (an all-time high). Over the 28 years from 1980 to 2008, the CPI has grown at a compounded annual rate of 3.3%. In 2008 a Troy ounce of gold sells for $730.

a. In real terms, with 1980 as the reference year, what is the 2008 price of gold per ounce in 1980 purchasing power?

b. If gold increases in value to keep pace with the CPI, how many years will it take to grow to $850 per ounce in 2008 purchasing power?

c. What was the real interest rate earned from 1980 to 2008 of an ounce of gold?

Reference no: EM131096816

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