Exercise

Adjusting Future Values for Inflation

You can now put together what you learned in the previous exercises by following a simple methodology:

First, forecast the future value of an investment given a rate of return
Second, discount the future value of the investment by a projected inflation rate

The methodology above will use both the .fv() and .pv() functions to arrive at the projected value of a given investment in today's dollars, adjusted for inflation.

Instructions

100 XP

Calculate the future value of a $10,000 investment returning 8% per year for 10 years using .fv() and assign it to investment_1.
Calculate the inflation-adjusted present value of investment_1, using an inflation rate of 3% per year and assign it to investment_1_discounted.

Take Hint (-30 XP)