Price per Unit in Units Purchased 2008 5. Good A Good B 10 $2.50 $3.00 Good C 4 S4.50 $5.00 If 2009 is the base year, the inflation rate between 2009 and 20 Select one: Oa. 9.4% Ob. 12.29% 7.0% 13.9% 2. e to search
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Q: Price per Unit in Units Purchased 2008 2009 2010 Good A 5 $1.00 $1.50 $1.50 Good B 10 $2.00 $2.50…
A: Inflation refers to increase in the average price level of goods and services.
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- The current gasoline price is $3.50 per gallon,and it is projected to increase next year by 4%, 6%the following year, and 8% the third year. What is theaverage inflation rate for the projected gasoline pricefor the next three years?Global steel prices have a yearover-year inflationary rate increase of 12.4%. Tube Fab purchased $700,000 of a particular carbon steel during the year just ended right now, and they intend to purchase the same quantity at the end of each of the next 5 years. Tube Fab earns a real rate of 16.0% on their money. Solve, a. Determine the then-current amounts they will pay for steel at the end of each of the next 5 years. b. Determine the constant value amounts they will pay for steel at the end of each of the next 5 years. c. Determine Tube Fab’s PW of expenditures over the next 5 years using then-current dollars. d. Determine Tube Fab’s PW of expenditures over the next 5 years using constant-value dollars.i need a and b answer. 9: Assume the market interest rate is 8% per year and inflation averages 5.8% per year. a) Calculate the perpetual equivalent annual worth in future dollars for years 1 through ∞ for an income of $73,000 now and $5000 per year thereafter. b) If the amounts had been quoted in CV dollars, what is the annual worth in future dollars?
- Find the real amounts (with today as the base year) corresponding to the current amounts shown below for a 4% inflation rate. (a) $400 three years from now (b) $400 three years ago (c) $10 next year (d) $350983 in 10 years from nowInflation has been a reality for the general economy of the U.S. in many years. Given this assumption, calculate the number of years it will take for the purchasing power of today’s dollars to equal onethird of their present value. Assume that inflation will average 2.5% per year.A machine costs $20,000 today. If inflation is 8% per year and interest is 10% per year, what will be the appropriate future value of the machine adjusted for inflation in 5 years? no excel
- Ima Luckygirl recently found out that her grandfather had passed away and left her his Rocky Mountain Gold savings account. The only deposit was 75 years ago, when Ima’s grandfather deposited $5000. If the account has earned an average rate of 10% and inflation has been 4%, answer the following: (a) How much money is now in the account in actual dollars? (b) Express the answer to part (a) in terms of the purchasing power of dollars from 75 years ago.The cost of first-class postage has risen by about 5% per year over the past 30 years. The U.S. Postal Service introduced a one-time forever stamp in 2008 that cost 41 cents for first-class postage (one ounce or less), and it will be valid as first-class postage regardless of all future price increases. Let’s say you decided to purchase 1,000 of these stamps for this one-time special rate. Assume 5% inflation and your personalMARR is 10% per year (im). Did you make a sound economical decision?Shea is pricing materials (wood, wire, pipe, etc.) for new home construction on a “per unit” basis. Inflation on materials has been running at 16.0% for the past 3 years and is expected to remain at that rate for the next 10 years. The actual dollars paid for expenses at the end of year 3 for a “unit” are $55,000. Solve, a. What did the same set of materials cost 3 years ago? b. If the trend continues, what will they cost 10 years from now?
- b. The price of a product was $0.88 in the year 2008 and $1.28 in the year 2018. What is the average annual inflation rate for this product? (ANSWER CHOICES: 3.82 % or 3.68 % or 3. 98% or 3.42%) c. If the CPI for January 2008 is 208.837 and the CPI for December 2018 is 255.539, what is the average annual inflation rate (per year) from Jan 2008 to Dec 2018? (Hint: Calculate monthly inflation rate and then use annual effective interest rate) (ANSWER CHOICES: 1.75% or 1.85% or 1.95% or 1.65%)The U.S. stock market has returned an average of about 9% per year since 1900. This return works out to a real return (i.e., adjusted for inflation) of approximately 6% per year. Solve, a. If you invest $100,000 and you earn 6% a year on it, how much real purchasing power will you have in 30 years? b. If you invest $5,000 per year for 20 years, how much real purchasing power will you have at the end of 30 years? The interest rate is 6% per year.Tom Ward put $10,000 in a 5-year certificate of deposit that pays 3.5% interest per year. At maturity he will receive his $10,000 back. Tom’s marginal income tax rate is 24%. If the inflation rate is 2% per year, find his (a) before-tax rate of return, ignoring inflation(b) after-tax rate of return, ignoring inflation(c) after-tax rate of return, after taking inflation into account