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If an investment of P24,500 twenty-four years ago is now worth P55,000, at what rate, compounded semi-annually, did it earn? What is the nominal rate, effective rate and real interest rate if inflation is 4.6% (base rate: nominal interest rate)?

 Dec 5, 2021
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Not sure I understand the question...but here is a try

  Inflation DE-values the investment by 4.6 % per year :    i = -.046

  Find the investment rate that results in 55000 in 24 years if   i =  x/ 2    compounded semi

 

   55000 = 24500 ( 1 + x/2)48   ( 1 - .046)24

      

x = 8.244%    nominal interest rate    ( the interst rate if inflation is taken into account)

       3.34  real interst rate            effective rate = 3.43 %    (these are the values if there is no inflation)      

 Dec 5, 2021

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