# ECONOMICS (CBSE/UGC NET)

## ECONOMICS

### INFLATION

 Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Which equation can be used to calculate the “real value” of a \$5000 investment with an interest rate of 5.2% p.a. compounded quarterly for 5 years, the average rate of inflation was 1.9% over this period. [1 pt]
 A B C D
Explanation:

Detailed explanation-1: -The real rate of return formula is: (1+NominalRate) ÷ (1+InflationRate)-1. This calculation determines the cash value of your investment after accounting for the impact of inflation and taxes.

Detailed explanation-2: -An investment of \$1, 000 made today will be worth \$1, 480.24 in five years at interest rate of 8% compounded semi-annually.

Detailed explanation-3: -Summary: An investment of \$10000 today invested at 6% for five years at simple interest will be \$13, 000.

Detailed explanation-4: -The future value of \$1, 000 one year from now invested at 5% is \$1, 050, and the present value of \$1, 050 one year from now assuming 5% interest is earned is \$1, 000.

There is 1 question to complete.