kemal will receive 7000 a year in real terms for the next 8 years at the end of each year with the first payment occurring one year from today

Finance Jan 13, 2021

kemal will receive 7000 a year in real terms for the next 8 years at the end of each year with the first payment occurring one year from today. ?f the nominal discount rate is 8.2 percent and the inflation rate is 2.3 percent, what are kemal's winnings worth today in real dollars?

Expert Solution

Kemal's winnings worth today in real dollars
=7000/(1.082/1.023-1)*(1-1/(1+1.082/1.023-1)^8)
=43871.642346

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