PPT Slide

IP1 = 5%/1.0 = 5.00%.

IP10 = [ 5 + 6 + 8(8)]/10 = 7.5%.

IP20 = [ 5 + 6 + 8(18)]/20 = 7.75%.

Must earn these IPs to break even vs. inflation; these IPs would permit you to earn k* (before taxes).

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