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.
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For a nominal inflation-adjusted interest rate of 24% per year compounded monthly, calculate the real interest rate per month when the inflation rate
is 0.5% per month.
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- Provided the inflation rate is f percent per year, to determine the purchasing power of $10,000 ten years from now, the $10,000 must be:a. divided by (1 + f )10b. multiplied by (1 + f )10c. divided by (1+ 0.10) fd. divided by (1 + f )"An annuity provides for 15 consecutive end-of-year payments of $73,000 in actual dollars. The general inflation rate is 5% annually, and the inflation-free interest rate is 5% annually. What is the present value of the annuity after considering the effects of inflation?"The purchase of a car requires a $25 000 loan to be repaid in monthly instalments for four years at 9% interest compounded monthly. If the general inflation rate is 4% compounded monthly, find the actual- and constant-dollar value of the 20th payment.
- The future amount of P100,000 for a period of 8 years is equal to P341,655.49. Considering money is worth 10% per year with an inflation rate of "x " per cent per year, find the value of inflation rate.Calculate the inflation-adjusted interest rate when the annualized inflation rate is 7% per yar and the real interest rate is 4% per year..Calculate the present worth of $35,000 to be received 6 years from now, if the predicted real rate of return is 15% per year and the inflation rate is 10% per year. The present worth of $35,000 is $ .
- 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.If the market interest rate is 12% per year and the inflation rate is 5% per year, the number of future dollars in year 7 that will be equivalent to $2000 now is best represented by the equation: (a) Future dollar amount = 2000(1 + 0.198)7 (b) Future dollar amount = 2000/(1.198)7 (c) Future dollar amount = 2000(1 + 0.12)7 (d ) Future dollar amount = 2000/(1.07)7If the market interest rate is 16% per year when the inflation rate is 9% per year, the real interest rate is closest to:a. 6.4%b. 7.3%c. 9.4%d. 16.1%
- Suppose you have $100,000 cash today and you can invest it to become a millionaire in 15 years. What is the present purchasing power equivalent of this $1,000,000 when the average inflation rate over the first seven years is 5% per year, and over the last eight years it will be 8% per year?Assume your salary is $55,000 in 2015 and $160,000 in 2045. If inflation has averaged 2% per year, what is the real or differential inflation rate of salary increases?As an innovative way to pay for various software packages, a new high-tech service company has offered to pay your company, Custom Computer Services (CCS), in one of three ways: (1) pay $400, 000 now, (2) pay $1, 000, 000 5 years from now, or (3) pay 5 equal annual installments of $140, 000. If you, as president of CCS, expect to earn a real interest rate of 1/9 ~ 11.11% per year when the inflation rate is 12.5% per year, which offer should you accept? Justify your answer by showing that equivalent value of each option at some common point in time. Please explain well