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Q: Inflation
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- Rosalie the Retiree knows that when she retires in 16 years, her company will give her a one-time payment of 20,000. However, if the inflation rate is 6 per year, how much buying power will that 20,000 have when measured in todays dollars? Hint: Start by calculating the rise in the price level over the 16 years.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?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?
- 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?An economist has predicted that for the next 5 years, the U.S. will have a 2.5% annual inflation rate, followed by 5 years at a 3.5% inflation rate. This is equivalent to what average price change per year for the entire 10-year period?Jeff just received a refund of $2,178 from his family physician. This was anoverpayment on his account, and it has been three years since the overpayment was due. Jeff is really frosted by this delay! What is the purchasing power now (year 0) of the overpayment if inflation has been 4%, 3%, and 2%, respectively, in years −3 (three years ago), −2 (two years ago), and −1 (last year)?
- 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 $ .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?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.
- In 1923, a certain country underwent one of the worst periods in history of hyperinflation, which is extraordinarily large inflation in prices. At the peak of the hyperinflation, prices rose 34,000% per month. At this rate, by what percentage would prices have risen in 1 year? In 1 day? (Assume 30 days per month.) The annual inflation rate is ×10%. (Type whole numbers.) The daily inflation rate is nothing%. (Round to the nearest whole number as needed.)What is the cost for having inflation indexation as a product featurePrices 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.
