Engineering Economy
Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
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Chapter 8, Problem 24P
To determine

Evaluate the situation.

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The cost of first-class postage has risen by about 5% per year over the past 30 years. The U.S. Postal Service introduced a one-time forever stamp in 2008 that cost 41 cents for first-class postage (one ounce or less), and it will be valid as first-class postage regardless of all future price increases. Let’s say you decided to purchase 1,000 of these stamps for this one-time special rate. Assume 5% inflation and your personalMARR is 10% per year (im). Did you make a sound economical decision?
Goods costing $27.10 at the beginning of the year 1940 cost $176.52 at the beginning of the year 1979. Find the average annual inflation rate over this time period. Express your answer the nearest thousandth of a percent.
An engineer's salary was P50, 000.00 in 2006. The same engineer's salary in 2011 is P80, 000.00. If the company's salary policy dictates that a yearly raise in salaries reflect the cost of living increase due to inflation, what is the average inflation rate?
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