You know that the CPI is 110.2 in year 3, and the inflation rate from year 2 to year 3 is 1.3%. What is the inflation rate from year 1 to year 2 if year 1 is the base year ?
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CPI, consumer price index is a measure of relative change in price of market basket of goods and services consumed.
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- If the annual inflation rate in an economy is i, then $1 borrowed at the beginning of a year will have the same purchasing power as ________ dollars at the end of the year. i (1/i) (1 − i) (1 + i)If the inflation rate is 7% per year, and your nominal income increases by 6% per year, your real income decreases by 2% decreases by 1% does not change increases by 1%If the Consumer Price Index was 107 in one year and 104 in the following year, then the rate of inflation was approximately
- Suppose the CPI in year 1 is 137. Given that the inflation rate is 0.3% in year 2 and 4.2% in year 3, how much does it cost at the end of year 3 to purchase the same goods and services that cost 260 at the beginning of year 1.Calculate the inflation-adjusted interest rate when the annualized inflation rate is 7% per year and the real interest rate is 4% per year.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.
- Prices 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.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?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?
- Calculate the real interest rate per month if the nominal inflation-adjusted interest rate per year, compounded monthly, is 18% and the inflation rate per month is 0.5%.We have the following price level data: Year 1 is 500 Year 2 is 550 Year 3 is 638 Year 4 is 638 Calculate:a) the inflation rate in year 3 to the base year b) the first-year CPI, c) the inflation rate in year 4 to the base year d) the inflation rate in year 3 to the previous yearCalculate the inflation rate from 2020 to 2021 if the index number in 2020 was 145 and increased to 152 in 2021
