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The inflation rate over a 10-year period for an item that now costs $1000 is shown in the following table. (a) What will be the cost at the end of year
10? (b) Do you get the same cost using an average inflation rate of 5% per year through the 10-year period? Why?
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- SA inflation eases slightly in JanuaryInflation eased to 5.7% in January, down from 5.9% the month prior — which was a hair’s breadth away from theceiling of the South African Reserve Bank’s target range of 3% to 6%, it was announced on Wednesday.According to Statistics South Africa, the main contributors to the 5.7% annual inflation rate were food and nonalcoholic beverages, housing and utilities, transport and miscellaneous goods and services.The 5.9% annual increase in December was the highest since March 2017, when the rate was 6.1%. The Januaryslowdown in inflation was helped by lower fuel prices.South Africa’s inflation numbers come as advanced economies post record figures, which have served as furtherproof that elevated prices are a stubborn feature of the recovery from the Covid-induced economic slump…Elevated inflation, which central banks have said will be transitory, is the result of Covid-related supply bottlenecks Answer all of the following questions using the above…SA inflation eases slightly in JanuaryInflation eased to 5.7% in January, down from 5.9% the month prior — which was a hair’s breadth away from theceiling of the South African Reserve Bank’s target range of 3% to 6%, it was announced on Wednesday.According to Statistics South Africa, the main contributors to the 5.7% annual inflation rate were food and nonalcoholic beverages, housing and utilities, transport and miscellaneous goods and services.The 5.9% annual increase in December was the highest since March 2017, when the rate was 6.1%. The Januaryslowdown in inflation was helped by lower fuel prices.South Africa’s inflation numbers come as advanced economies post record figures, which have served as furtherproof that elevated prices are a stubborn feature of the recovery from the Covid-induced economic slump…Elevated inflation, which central banks have said will be transitory, is the result of Covid-related supply bottlenecks. “The South African Reserve Bank’s target range of 3% to…SA inflation eases slightly in JanuaryInflation eased to 5.7% in January, down from 5.9% the month prior — which was a hair’s breadth away from theceiling of the South African Reserve Bank’s target range of 3% to 6%, it was announced on Wednesday.According to Statistics South Africa, the main contributors to the 5.7% annual inflation rate were food and nonalcoholic beverages, housing and utilities, transport and miscellaneous goods and services.The 5.9% annual increase in December was the highest since March 2017, when the rate was 6.1%. The Januaryslowdown in inflation was helped by lower fuel prices.South Africa’s inflation numbers come as advanced economies post record figures, which have served as furtherproof that elevated prices are a stubborn feature of the recovery from the Covid-induced economic slump…Elevated inflation, which central banks have said will be transitory, is the result of Covid-related supply bottlenecks 1.16 From the above extract, the South African economy…
- SA inflation eases slightly in JanuaryInflation eased to 5.7% in January, down from 5.9% the month prior — which was a hair’s breadth away from theceiling of the South African Reserve Bank’s target range of 3% to 6%, it was announced on Wednesday.According to Statistics South Africa, the main contributors to the 5.7% annual inflation rate were food and nonalcoholic beverages, housing and utilities, transport and miscellaneous goods and services.The 5.9% annual increase in December was the highest since March 2017, when the rate was 6.1%. The Januaryslowdown in inflation was helped by lower fuel prices.South Africa’s inflation numbers come as advanced economies post record figures, which have served as furtherproof that elevated prices are a stubborn feature of the recovery from the Covid-induced economic slump…Elevated inflation, which central banks have said will be transitory, is the result of Covid-related supply bottlenecks Which of the following presents the view of inflation…Hila Co. operates under a hyperinflationary economy. Hila computed the increase in current cost of inventory as follows:Increase in current cost (nominal pesos) P15,000Increasse in current cost (constant pesos) P12,000 What amount should Hila disclose as the inflation component of the increase in current cost of inventories?a. 3000b. 12,000c. 15,000d. 27,000Explain how Depreciation Allowance under Inflation?
- If the CRR is given as 18.2% and the cash reserves in the economy are 2100 find the value of demand depositExplain Effects of Inflation on Projects with Depreciable Assets?A ham radio operator wishes to borrow $160,000 to construct a world-class antenna system, transceiver, and amplifier at an electrically quiet location that can be accessed remotely and controlled via the Internet. Microphone, Morse code, radio teletype, slow-scan TV, and a host of other modes may be used for contesting, amassing DX awards, and chatting from anywhere in the world. She borrows the money at 8.5%. Annual inflation is 3.8%. Her combined MARR is 9%. The loan is to be paid back over 5 years. What is the amount to be paid at each year-end and the PW (using both then-current and constant-dollar approaches) if repayment follows: Plan 3 (make equal annual payments)?
- A ham radio operator wishes to borrow $160,000 to construct a world-class antenna system, transceiver, and amplifier at an electrically quiet location that can be accessed remotely and controlled via the Internet. Microphone, Morse code, radio teletype, slow-scan TV, and a host of other modes may be used for contesting, amassing DX awards, and chatting from anywhere in the world. She borrows the money at 8.5%. Annual inflation is 3.8%. Her combined MARR is 9%. The loan is to be paid back over 5 years. What is the amount to be paid at each year-end and the PW (using both then-current and constant-dollar approaches) if repayment follows: Plan 1 (pay accumulated interest each year and principal at the end of the last year)? Plan 2 (make equal annual principal payments each year, plus interest on the unpaid balance)? Plan 3 (make equal annual payments)? Plan 4 (make a single payment of principal and interest at the end of the last year)?What is the uninflated present worth of a P 200,000 future value in two years if the average inflation rate is 6% and interest rate is 10%?Suppose that you just purchased a used car worth $14.000 in today's dollars. Assume also that. to finance the purchase. you borrowed $12,000 from a local bank at 8% compounded monthly over two years. ·n1e bank calculated your monthly payment at $542.36. Assume that average general inflation will run at I% per month over the next two years.(a) Determine the annual inflation-free interest rate (i') for the bank.(b) What equal monthly payments, in terms of constant dollars over the next two years, arc equivalent to the series of actual payments to be made over the life of the loan?