If the market interest rate is 12% per year and the inflation rate is 5% per year, the number of future dollars in year 7 that will be equivalent to $2000 now is best represented by the equation: Future dollar amount = 2000(1+0.198)7 Future dollar amount = 2000/(1.198) Future dollar amount = 2000(1+0.12)7 Future dollar amount = 2000/(1.07)

If the market interest rate is 12% per year and the inflation rate is 5% per year, the number of future dollars in year 7 that will be equivalent to $2000 now is best represented by the equation: Future dollar amount = 2000(1+0.198)7 Future dollar amount = 2000/(1.198) Future dollar amount = 2000(1+0.12)7 Future dollar amount = 2000/(1.07)

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter2: The One Lesson Of Business

Section: Chapter Questions

Problem 2.6IP

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