1. You would like to have the current equivalent of $400,000 in 3 years.
Your investments earn 6.00% APR compounded annually.
You expect that inflation over the 3 years will average 4.00% per year.
How much would you have to invest today in nominal terms to be able to have just enough in 3 years to have $400,000 in real terms?
$389,116
$396,672
$377,783
$366,450
$370,227
2. You would like to have the current equivalent of $400,000 in 3 years.
Your investments earn 6.00% APR compounded annually.
You expect that inflation over the 3 years will average 4.00% per year.
How much would you have to invest per year, for three years, starting in 1 year (the same amount in each year) in nominal terms to be able to have just enough in 3 years to have $400,000 in real terms?
$145,572
$138,506
$148,399
$137,092
$141,332