The real rate of return is 60 percent and the expected


You are buying a sofa. You will pay $200 today and make three consecutive annual payments of $300 in the future. The real rate of return is 6.0 percent, and the expected inflation rate is 4 percent. What is the actual price of the sofa? (Round intermediate calculation and final answer to 2 decimal places, e.g. 15.25.)

Actual Price: $____________

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Financial Management: The real rate of return is 60 percent and the expected
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