An Investor Can Earn a 6% Nominal Rate of Return

question 40

Multiple Choice

An investor can earn a 6% nominal rate of return but inflation is expected to be 3%.If the individual invests $2,000 per year for 20 years the real future value of their investment is ________.(All investments occur at year end) .

• A) $73,571
• B) $66,334
• C) $53,251
• D) $48,732

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Definitions:

Mountains

Large natural elevations of the Earth's surface, rising abruptly from the surrounding terrain and often characterized by high peaks and significant altitude differences.

Solar Radiation

The energy emitted by the sun, including ultraviolet, visible, and infrared light, which reaches Earth and influences climate and weather patterns.

Earth's Climate

The average weather conditions, including temperature, precipitation, and wind, in a region over long periods of time.

Permafrost

Permanently frozen ground that occurs in high latitude or altitude regions.