Finance Questions

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  • June 17, 2017 at 6:17 am #16026
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    Keymaster

    If the real rate of return has been about 1% per month for long-term bonds, what would be the value of an investment that costs $100 today and returned $200 in 10 years?

    June 17, 2017 at 6:18 am #16027
    admin
    Keymaster

    Solution
    1% monthly = 12% annually
    (-) $100 + $200/(1+.12)10
    = (-) $100 + $64.39
    = (-) $35.60

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