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An inflation rate of 7 percent would erode the
A). 6.5
B) 3.5
C) 7
D) 14.3
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- Suppose your annual nominal income for the next four years is $78,500, and the annual inflation rate is 7.1%. Calculate the real value of your $78,500 salary at the end of the fourth year. A. $57,847.11 B. $59,664.06 C. $65,768.24 D. $71,987.16 E. $73,142.88Suppose your annual nominal income for the next four years is $78,500, and the annual inflation rate is 7.1%. Calculate the real value of your $78,500 salary at the end of the fourth year.If you deposit $10,000 in a bank account that pays a 2% interest compounded monthly for five years,what would be your economic loss if the general inflation rate is 3% during that period?
- Assume a constant inflation rate of 5% annually and 0% interest rate. Over a whole period of 14 years. A real estate investment after 4 years would consume 307,500$. Lasting to 10 years the income is a constant of 170,000$ each year. A) What would be the equivalence selling price for the real estate in year 0?Prices are increasing at an annual rate of 6% the first year and 10% the second year. Determine the average inflation rate (f) over these two years.For a nominal inflation-adjusted interest rate of 24% per year compounded monthly, calculate the real interest rate per month when the inflation rateis 0.5% per month.
- Cross-Country Shipping, Inc. had “Revenues” of $5,750,000 during its most recent fiscal year and “Labor Costs” of $2,250,000. The firm is expecting an inflation rate of 6.0% during the coming year. Given this information calculate the following values for the coming year for Save-Rite Grocers: “Revenues:” “Labor Costs:”If you deposit $12,000 in a bank account that pays a 4% interest compounded monthly for five years, what would be your economic loss if the general inflation rate is 5% during that period?Calculate the real interest rate per month if the nominal inflation-adjusted interest rate per year, compounded monthly, is 18% and the inflation rate per month is 0.5%.
- A friend is celebrating her birthday and wants to start saving for her anticipated retirement. She has the following years to retirement and retirement spending goals. Years until retirement: 30 Amount to withdraw each year: $120,000 Years to withdraw in retirement: 25 Interest rate: 7.5% Because your friend is planning ahead, the first withdrawal will not take place until one year after she retires. She wants to make equal annual deposits into her account for her retirement fund. Assume that the inflation rate is 3%. Consequently, when your friend retires she will want to withdraw $120,000 each year in today’s dollars. What amount is she planning to receive in year 31 (the end of her first year of retirement)?Calculate the inflation-adjusted interest rate when the annualized inflation rate is 7% per yar and the real interest rate is 4% per year..A father wants to save for his 8-year-old son’scollege expenses. The son will enter college 10 yearsfrom now. An annual amount of $40,000 in today’sconstant dollars will be required to support the son’scollege expenses for four years. Assume that thesecollege payments will be made at the beginning ofthe school year. The future general inflation rate isestimated to be 6% per year, and the market interestrate on the savings account will average 8% compounded annually. Given this information,(a) What is the amount of the son’s freshman-yearexpense in terms of actual dollars?(b) What is the equivalent single-sum amount at thepresent time for these college expenses?(c) What is the equal amount, in actual dollars, thefather must save each year until his son goes tocollege