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The rate of inflation refers to the percentage rise in the index of price from the preceding period.
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- If the inflation rate is 6% per year, how many (future) dollars will be required 10 years from now to buy the same things that $32,500 buys now? The (future) dollars required to buy the same things that $32,500 buys now is $ .If the inflation rate is 6% per year and you want to earn a real return of 10% per year, how many future dollars must you receive 10 years from now for an investment of $10,000 today?.WHAT IS THE INFLATION RATE IF THE PRICE OF AN ELECTRIC FAN BECOMES P2000.00 IN 5 YEARS FROM THE ORIGINAL PRICE OF P1200.00?
- price per unit units produced 2007 2008 2009 2010 blueberries 8 $2 $2 $2.1 $2.8 pineapples 5 $2.5 $2.5 $2.5 $3 cheese 3 $2.5 $3 $3.5 $4 if 2009 is base year, the inflation rate between 2009 and 2010 isWell-managed companies set aside money to pay for emergencies that inevitably arise in the course of doing business. If a commercial solid waste recycling and disposal company puts 0.5% of its after-tax income into such an account, how much will the company have after 7 years, provided the company’s after-tax income averages $15.2 million per year? The inflation and market rates are 5% per year and 9% per year, respectively.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 $ .
- The Bank of England has an inflation calculator website that uses the UK price index to show how the cost of goods and services has changed since 1750. The website reveals that something that cost £10,000 in 1920 cost £7984 in 1940. What was the average annual inflation rate over that 20-year time period in the early-to-mid 20th century?According to the College Board, the average in-state tuition and fees at public 4-year colleges and universities increased from $1780 in 1990 to $9650 for the 2016–2017 school year (per full-time equivalent student). Calculate the relative change in public college cost over this time period, and compare it to the overall rate of inflation as measured by the CPI.The Fischer-Tropsch (F-T) process was developed in Germany in 1923 to convert synthesis gas (i.e., a mixture of hydrogen and carbon monoxide) into liquid with some gaseous hydrocarbons. Interestingly, the F-T process was used in World War II to make gasoline and other fuels. The U.S. military can save one billion gallons per year of foreign oil by blending its jet fuel with F-T products. If the government expects inflation to average 3% per year, what is the equivalent uniform annual savings in fuel? The government's MARR is 7% per year, the study period is 40 years, and one gallon of jet fuel costs $2.80. The AW is $_______billion.
- For many years, college cost (including tuition, fees, room, and board) increases have been higher than the inflation rate, averaging 5% to 8% per year. According to the College Board’s Trends in College Pricing, the average total costs in 2015 dollars were $19,548 for students attending in-state 4-year public colleges and universities and $43,921 for students at 4-year private colleges and universities. Assume an additional $4000 per year for textbooks, supplies, transportation, and other expenses. Using a 7% per year inflation rate, (a) how much can a sophomore high-school student expect to spend on in-state tuition, fees, room, and board for the freshman year (3 years from now) at a 4-year public university, and (b) what is the estimated total cost for the second year at the university, if textbooks, supplies, etc. also increase at 7% per year?A machine currently under consideration by Marcus Industries has a cost of $31, 000. When the purchasing manager complained that a similar machine the company purchased 5 years ago was much cheaper, the salesman responded that the cost of the machine has increased solely in accordance with the inflation rate, which has averaged 5% per year. When the purchasing manager checked the invoice for the machine he purchased 5 years ago, he saw that the price was $25,000. Was the salesman telling the truth about the increase in the cost of the machine? What should the machine cost now, provided the price increased by only the inflation rate? Use the formulaAs indicated, some of the cash flows are expressed in future (then-current) dollars and others in current-value (today’s) dollars. Use a real interest rate of 10% per year and an inflation rate of 6% per year. Find the present worth of the estimated cash flows. The present worth of the estimated cash flows is $