Interest, Present Value, and Yield Curves
You just use the compound interest formula. A = P(1 + r/m)mt A= P(1 + r)t. Note: This is the actually formula due to n being equal to 1. A= 30,000(1.06)10. A=$53,725.43 WOW!!! What a difference!!! In problems 16-20, calculate the expected price in the year 2008 if you assume that there was a consistent 5% inflation rate and use the given 1988 ... ................
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