Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 62

Earl plans to keep the stocks or bonds for 12 years, that is, until the bond matures. However, he wants to make the 7% per year real return and make up for the expected 4% per year inflation. For what amount must he sell the stocks after 12 years, or buy the bonds now to ensure he realizes this return Do these amounts seem reasonable to you, given your knowledge of the way that stocks and bonds are bought and sold