SOLUTION: A company invest 10,000 today to be repaid in five years in one lump sum at 12% compounded annually. If the rate of inflation is 3% compounded annually, how much profit in present

SOLUTION: A company invest 10,000 today to be repaid in five years in one lump sum at 12% compounded annually. If the rate of inflation is 3% compounded annually, how much profit in present

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Question 1086545: A company invest 10,000 today to be repaid in five years in one lump sum at 12%
compounded annually. If the rate of inflation is 3% compounded annually, how much profit in present day is realized over five years?
Answer by jorel1380(3719) (Show Source): You can put this solution on YOUR website!
10000 x (1.12)^5=17623.416832
10000 x (1.03)^5=11592.740743
profit=17623.416832-11592.740743=6030.676089
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