Contemporary Engineering Economics (6th Edition)
Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 11, Problem 11P
To determine

Calculate the actual and constant dollar.

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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.
Provided the inflation rate is f percent per year, to determine the purchasing power of $10,000 ten years from now, the $10,000 must be:a. divided by (1 + f )10b. multiplied by (1 + f )10c. divided by (1+ 0.10) fd. divided by (1 + f )
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