a. The historical average rate of inflation in the United States is 4%. If you bury $770. What will the buying power of that money be in todays dollars in 17 years? $ _____
b. For a particular year the inflation rate was 3.19%. What was the real interest rate of return on a CD that payed 8.34% for that year? _____ %
You have $32780 to invest for retirement. You expect to retire in 50 years. A particular index fund has a long history of paying 7.47%, and inflation is estimated to be 3.1%.
c) If you invest in that fund what would you expect your actual saving to be when you retire? $ _____
d) What will your real value be at the time you retire? $ _____