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?
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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?
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- Q6. 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.Suppose that the inflation rate during a year is 5 per cent. During that year, you deposited $500 in your bank account and received an annual nominal interest rate of 10 per cent. What is the real purchasing power of your deposit at the end of the year? $500 $550 $525 $523The following represents the inflation rates of foreign country X for the past 5 years: Year 1: 35% Year 2: 20% Year 3: 25% Year 4: 30% Year 5: 15% Which statement is correct about the selection of a functional currency for country X at the end of year 5. a. Country X is highly inflationary; the US dollar must be used b. Country X is highly inflationary; the foreign currency must be used c. Country X is not highly inflationary; the US dollar must be used d. Country X is not highly inflationary; either the US dollar or the foreign currency may be used depending on the factors to determine the functional currency e. Country X is not highly inflationary; the foreign currency must be used
- 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?How much money can the Eastman Land and Cattle Company afford to spend now for a tractor trailer in lieu of spending $69,000 three years from now, if the interest rate is 13% per year and the inflation rate is 6.1% per year? NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. Solve by factors. The Eastman Land and Cattle Company can afford to spend $ .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. $73,142.88
- 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 wellIn wisely planning for your retirement, you invest $22,000 per year for 20 years into a 401K tax-deferred account. Assume you make a real return of 10% per year when the inflation rate averages 3.2% per year. How many future dollars will you have in the account immediately after your last deposit? You will have $ future dollars in your account immediately after your last deposit.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?
- You purchase a certificate of deposit that pays an advertised rate of 2.30% interest per year. Your real rate of return if the actual inflation rate is 1.75% is ____% [round to the nearest hundredth of a percent].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?In order to make up for the future loss in purchasing power. the rate at which you earn interest must be sufficiently higher than the anticipated inflation rate. True or false?
