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    saleemf's Avatar
    saleemf Posts: 1, Reputation: 1
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    #1

    Sep 10, 2009, 04:21 AM
    Investment appraisal methods and calcualation of nominal rate of return
    Calculate the nominal rate of return by using real rate of return and the expected inflation rate of 2.2% and tell me how to use the investment appraisal methods after doing this?
    Thanks for help.
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
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    #2

    Sep 10, 2009, 04:36 AM
    With the one-period real return r, the inflation rate i, and the nominal return n all expressed as decimals, the following equality holds...

    (1 + n) = (1 + r)(1 + i)

    Given any two of the three you can quickly find the third.

    As to the second part of your question, explain that a bit more, and tell me your thoughts on it.
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