Question

Your grandfather advised you to invest $10,000 in a CD because that is how he saved his money back in the 70's and 80's. You do some research and find that the best CD rate has an annual rate of return of 0.7%. According to another internet search, inflation is projected to beat 2.2% over the next two years. What will be the real future value of the investment (using the real interest rate) at the end of the 2-year deposit term? Real interest rate, i = Future Value of investment, FV =

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