Last year, you earned a nominal rate of return of 6.92 percent on your bond investments. During that time, the inflation rate was 2.74 percent. How much did your purchasing power increase (real rate)

Real rate of return=  0.0418 = 4.18%

Explanation:

Giving the following information:

Nominal rate of return= 6.92%

Inflation rate= 2.74%

The inflation rate decreases the purchasing power of nominal money.

To calculate the real rate of return, we need to use the following formula:

Real rate of return= nominal rare of return - inflation rate

Real rate of return= 0.0692 - 0.0274

Real rate of return=  0.0418 = 4.18%

urban company reports the following information regarding its production cost: units produced 37,000 units direct labor $ 30 per unit direct materials $ 35 per unit variable overhead $ 237,000 in total fixed overhead $ 127,000 in total

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