11. Sophia pays $200 into a bank account at the end of each month. The annual interest paid on money in the account is 3.1% which is compounded monthly. a. Find the value of her investment after a period of 5 years. b. The average rate of inflation per year over the 5 years was 2%. Find an approximation for the real interest rate for the money invested in the account. С. Hence find the real value of Sophia's investment at the end of 5 years.

11. Sophia pays $200 into a bank account at the end of each month. The annual interest paid on money in the account is 3.1% which is compounded monthly. a. Find the value of her investment after a period of 5 years. b. The average rate of inflation per year over the 5 years was 2%. Find an approximation for the real interest rate for the money invested in the account. С. Hence find the real value of Sophia's investment at the end of 5 years.

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter7: Unemployment And Inflation

Section: Chapter Questions

Problem 3.7P

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