1. Say you own an asset that had a total return last year of 10.9 percent. If the inflation rate last year was 5.3 percent, what was your real return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Real return
2. How much will $25,000 invested at 2.5%, simple interest, be worth in 4 fours? What will it be worth if the interest rate is 5%? Compute for compound interest rate.
3. If investors require a 10 percent real rate of return, and the inflation rate is 8 percent, what must be the nominal rate of investment? Show your work.