Suppose your salary in 2018 is $50,000. Assuming an annual inflation rate of 8%, what salary do you need to earn in 2024 in order to have the same purchasing power?
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Suppose your salary in 2018 is $50,000. Assuming an annual inflation rate of 8%, what salary do you need to earn in 2024 in order to have the same
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- Assuming that the inflation rate from 2017 through 2019 is 6% per year: a) What would be the real value of a $65,000 income in each of the three years? (Show all work) b) What does the real income for 2019 mean?In 2019, the average salary of petroleum engineers was $98,400. Predict what their salary will be in 2028 if their salary increases only by the inflation rate. Assume the inflation rate over this time period is constant at 3.8% per year. The salary of the petroleum engineers will be $ .What will be the future value on December 31, 2023, of 5 annual $60,000 deposits starting on December 31, 2019, if the amounts earn 8% compounded annually? (Click here to access the PV and FV tables to use with this problem.) Round your answer to two decimal places. $ _________
- In each situation described below, identify the initial payment, the term interest rate, andthe number of compounding periods. An investment of $10000 made in January 2018 at an APR of 5% compounded monthly,and another investment of $20000 made in January 2025 at an APR of 3% compoundedweekly. What is the value of the account in January 2030?Suppose a government is making a series of payments to another government, up to the end of 2039. · The first payment is made on 1 January 2021, and is equal to $700,000; · All subsequent payments are made on the first of each quarter, but increasing at an inflation rate r, of r = 1.5% every 12 months (effective). · That is, the payments on 1 April 2021, 1 July 2021, 1 October 2021 are also $700,000 each, but all payments made in 2022 are $700,000(1+r) each, all payments made in 2023 are $700,000(1+r)2 each, and so on. (a) Assuming an interest rate of 12% per annum (effective), what is the present value of the above payments as at 1 October 2020?What is the present value on January 1, 2019, of $10,000 to be received on January 1, 2023, and discounted at 6% compounded quarterly? ____________________________ What is the future value on January 1, 2025, of $20,000 deposited on January 1, 2019, which accumulates interest at 10% compounded annually? ____________________________ What is the interest rate per period and the frequency of compounding per year in each of the following? If needed, round your interest rate answers to two decimal places. Interest RatePer Period Frequency of CompoundingPer Year a. 18% compounded semiannually _______% _______ times b. 16% compounded quarterly _______% _______ times c. 15% compounded monthly _______% _______ times
- If you have only P750 on July 10, 2023, what interest rate, compounded annually for 3 years, must you earn to have P1,000 on July 10, 2026?Suppose today is January 1, 2024 and you are given two options: a. an annuity that pays you 1000 dollars at the end of each year until January 1, 2030 starting from now; b. a perpetuity that pays you 1000 dollars at the end of each year, but the first cash payment is at the end of year 2034. In other words, the perpetuity starts after 10 years from today. Which of the options do you choose if the long-term value of APR is 5% compounded annually? Does your answer change if the rate is 10%? Explain your solutions.e. Suppose you can deposit only $200 each January 1 from 2019 through 2022 (4 years). What interestrate, with annual compounding, must you earn to end up with $1,000 on January 1, 2022?
- Suppose that an insurance agent offers you a policy that will provide you with a yearly income of $60,000 in 30 years. What is the comparable salary today, assuming an inflation rate of 6% compounded annually? (Round your answer to the nearest cent.)You wish to deposit $500 dollars per year. The first deposit will be on April 1, 2017, and your last deposit will be on April 1, 2026. How much will be in the account on April 1, 2050 if the bank pays 4% annually?Assume that in 2020, a Liberty Seated half dollar issued in 1890 was sold for $197,000. What was the rate of return on this investment?