For the 20 years ended December 31, 2008, the annually compounded rate of return on the portfolio of stocks represented by the S&P/TSX Composite Index was 2.66%. For the same period, the compound annual rate of inflation (as measured by the increase in the Consumer Price Index) was 2.39%.
a) What was $1000 invested in the S&P/TSX stock portfolio on December 31, 1998, worth 20 years later?
b) What amount of money was needed on December 31, 2008, to have the same purchasing power as $1000 on December 31, 1998?
c) For an investment in the Index stock portfolio, what was the percent increase in purchasing power of the original $1000?

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The Answer of For the 20 years ended December 31, 2008, the annually compounded rate of return on the portfolio of stocks represented by the S&P/TSX Composite Index was 2.66%. For the same period, the compound annual rate of inflation (as measured by the increase in the Consumer Price Index) was 2.39%.
a) What was $1000 invested in the S&P/TSX stock portfolio on December 31, 1998, worth 20 years later?
b) What amount of money was needed on December 31, 2008, to have the same purchasing power as $1000 on December 31, 1998?
c) For an investment in the Index stock portfolio, what was the percent increase in purchasing power of the original $1000?

For the 20 Years Ended December 31, 2008, the Annually