Q: A father wants to save in advance for his eight-year-old daughter's college expenses. The daughter…
A:
Q: If inflation has been 2% each year for the past 3 years, and over that time your salary has…
A: Solution ,
Q: In a specified year, nominal gross domestic product grew by 12 percent and real gross domestic…
A: Nominal GDP growth rate= Real GDP growth rate+ Inflation rate Here; Nominal GDP growth rate = 12%…
Q: The CPI has risen from 130 to 115, what is the inflation rate? 10% 20% 15%…
A: Inflation rate helps in determining the percentage of increase in prices of goods and services.
Q: There is a 1-year loan of $15,000. Both parties agree on a 6% of rental price of the money on the…
A: Given the loan amount = $15000 Interest rate on the loan amount = 6% Inflation rate = 8%
Q: With moderate 3% inflation, if a hamburger is costed $5 today (2016), how much it will become in…
A: The annual inflation rate is 3%, and it will remain the same. The cost of a hamburger in 2016 is $5
Q: Someone with dollar bills to lend will never agree to make a loan with a nominal interest rate of…
A: Nominal interest rate refers to the rate of interest before considering the inflation. A nominal…
Q: According to the price index, it costs 200 dollars to buy a typical basket of goods in one year.…
A: 220-200/200*100 20/200*100=10
Q: If median weekly earnings of $865 were to increase by 9%. at a time when the inflation rate were to…
A: given that, median weekly earnings of $865 increase by 9% the inflation rate was to drop by 4%
Q: If the effective annual interest rate is 8.00% per year and inflation is 3.25% per year what is the…
A: The real interest rate represents inflation, giving a more exact perusing of a borrower's purchasing…
Q: An economist has predicted that for the next 5 years, the U.S. will have a 2.5% annual inflation…
A: Inflation rate refers to the percentage change in the general price level of goods and services in…
Q: Tuition at xyz this year cost $61,170. If the inflation rate is 2% for the foreseeable future anfd…
A: We are provided that, For the first year (2038), we have P = 61, 170 i = 0.02 (2%) and t = 20. We…
Q: Find the value of inflation if real interest rate is 0 and nominal interest rate is 4.6%
A: We are given that:- Real interest rate = 0% Nominal interest rate = 4.6% Note- Real interest rate is…
Q: A country is experiencing an inflation rate of exactly 100 percent per month for 4 months. At the…
A: Inflation is the consistent rise in general price level over period of time . And growth of…
Q: "Consider the following cash flow in actual dollars. The inflation rate is 3.2%. The inflation-free…
A: With the given information, we first need to solve for an effective interest rate. To solve for…
Q: Forty years ago, a gallon of gas cost $1.20. Today, a gallon of gas costs 2.60. Suppose that the gas…
A: The gallon gas cost $1.20, fourty years ago. The present cost of gas is $2.60. The gas price…
Q: The first year Jeff paid for a membership at his gym, the fee was $440.00. He renewed his membership…
A: Here, it is given that Jeff paid his membership fees three times and nominal value changes…
Q: If the CPI in period 1 is 180 and the CPI in period 2 is 240, then the rate of inflation between…
A: CPI in period 1=180 CPI in period 2=240
Q: You just made an investment in an insurance policy that is guaranteed to pay you $2.6 million 20…
A: The quantity of goods and services that can be purchased with a monetary unit is referred to as its…
Q: In 1990 the Consumer Price Index (CPI) was 150. Today, the Consumer Price Index (CPI) is 250.…
A: Given Information: Current CPI = 250 Past CPI = 150 Inflation Rate = Current CPI – Past CPIPast…
Q: Price of wine Price of coffee 2021 $5 $5 2022 $9 $6 Assuming that wine and coffee…
A: Inflation basically refers as the rate at which prices rise over time. Inflation is usually defined…
Q: Shea is pricing materials (wood, wire, pipe, etc.) for new home construction on a “per unit” basis.…
A: Given Information: Inflation rate = 16% = 0.16% Years = 3 years ago Cost after 3 years (future cost)…
Q: Suppose Neha is a cinephile and buys only movie tickets. Neha deposits $3,000 in a bank account that…
A: When there is inflation and interest rate, purchasing power depends positively on interest rate and…
Q: If the bank posts a nominal interest rate of 7 per cent per year and the inflation rate is 5 per…
A: Nominal Interest Rate: It is the rate at which an investment will grow before accounting for…
Q: In a specified year, nominal gross domestic product grew by 12 percent and real gross domestic…
A: Nominal GDP growth rate= Real GDP growth rate+ Inflation rate Here; Nominal GDP growth rate = 12%…
Q: The price index was 120 in Year 1 and 126 in Year 2. What was the inflation rate?
A: Price index shows the price level at the given year. Inflation rate is the rate at which the price…
Q: How much money can the Eastman Land and Cattle Company afford to spend now for a tractor trailer in…
A: Present value is the theory that said an amount of money today is value greater than that same…
Q: If an investment has a nominal return of 3.8% per year, while the inflation is expected to be 3.6%…
A: Real return is the interest rate adjusted for inflation. Nominal return does not account for price…
Q: Suppose you borrow $1,000 of principal that must be repaid at the end of two years, along with…
A: Inflation refers to the sustained increase in the general price level of goods and services in an…
Q: A company is considering an investment in an item of equipment costing $150,000. Contribution per…
A: Present value refers to the existing value of money which is to be received in the future at a given…
Q: What is the value of inflation when real interest rate is 6% and the nominal interest rate is also…
A: # The difference between Nominal interest rate and real interest rate gives us the value of…
Q: If the effective annual interest rate is 9% per year and inflation is 3.8% per year what is the true…
A: Given Effective annual interest rate =9% per year Annual inflation rate =3.8% per year True or real…
Q: Assume a constant inflation rate of 5% annually and 0% interest rate. Over a whole period of 14…
A: Keeping in mind the law of one price, the equivalent selling price of an investment will be equal to…
Q: If inflation is 0% and the real interest rate is 3.3% Calculate nominal interest rate
A: The data presented in the question above is:- Inflation = 0% Real interest rate = 3.3% We need to…
Q: Suppose that you borrow $20,000 at 12%, compounded monthly, over 5 years. Knowing that the 12%…
A: Present value is the value of investment in today's dollar.Future value is the value of investment…
Q: If nominal interest rate is 8.5% and the inflation rate is 3.6% Calculate the real interest rate
A: The given information is as follows:- Nominal interest rate = 8.5% Inflation = 3.6%
Q: Calculate the inflation rate when Nominal Interest rate is 7% and real interest rate is 2.5%
A: # Due to inflation prevailing in the Market, the Nominal interest rate is actually lower and thus we…
Q: What is the inflation free (real interest rate) if the market rate is 12.6% and the inflation rate…
A: The interest rate which is calculated without taking in account the value of inflation is known as…
Q: For a real interest rate of 1% per month and an inflation rate of 1% per month, calculate the MARKET…
A: Answer: Given, Real interest rate= 1% per month Inflation rate= 1% per month Calculation: Market…
Q: f the nominal rate of interest is 13.94 % and the real rate of interest is 7.3 % what is the…
A: A nominal interest rate is the rate of interest before inflation is taken into account.The nominal…
Q: What is the approximate rate of inflation in year 3?
A: Inflation is the rate of growth of price. It is the percentage change in CPI
Q: A father wants to save in advance for his eight-year-old daughter's collegeexpenses. The daughter…
A: Interest rate per quarter can be calculated as follows:
Q: If the real interest rate is 4%, the inflation rate is 6%, and the tax rate is 20%, then the real…
A: Real interest rate is 4%.Inflation rate is 6%Tax rate is 20%.
if the real interest rate is -2.5% and the nominal interest rate is 6% expected inflation equals
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- Calculate the inflation rate from 2016 to 2017 if the index number in 2016 was 125 and increased to 128 in 2017.If the price index in 2017 is 132 and the price index in 2018 is 114, the rate of inflation between 2017 and 2018 is -5.8% 15.8% 6.4% -13.6%A country’s real GDP rose from $500 to $530 while its nominal GDP rose from $600 to $700. What was this country’s inflation rate?16.7%.10.0%.15.0%.- 9.1%
- Suppose you lent money to a friend a few years ago at a nominal interest rate of 6%. At the time ot he loan, you expected the annual inflation rate to be 2%, but the actual annual inflation rate was 1.2%. When the loan originated, you expected to earn a real return of but due to unexpected disinflation, you earned an actual real return of A. 2%; 1.2% OB. 4.8%; 6% C. 6%; 4.8% D. 4%; 4.8%Assume the economy is experiencing low and stable inflation, averaging 2% a year. Nadia loans her good friend Brett $12,000 to buy a car. Nadia and Brett agreed that he would repay the loan over the next 5 years at a 5% fixed interest rate. How would Nadia and Brett be affected if next year the inflation rate unexpectedly rises to 6%?Find inflation rate if real interest rate is 3% and nominal interest rate is 4.3%
- Suppose Rosa is a cinephile and buys only movie tickets. Rosa deposits $3,000 in a bank account that pays an annual nominal interest rate of 5%. Assume this interest rate is fixed-that is, it won't change over time. At the time of her deposit, a movie ticket is priced at $10.00. Initially, the purchasing power of Rosa's $3,000 deposit is movie tickets. For each of the annual Inflation rates given in the following table, first determine the new price of a movie ticket, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Rosa's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest movie ticket. For example, if you find that the deposit will cover 20.7 movie tickets, you would round the purchasing power down to 20 movie tickets under the assumption that Rosa will not buy…If the real interest rate is 6% and the inflation rate is 12%, then the nominal interest rate equals a) 2%. b) 0.5%. c) 6%. d) 36%.The CPI-U (U.S. city average, all items) has the following annual averages: a. For each year from 2014 to 2017 determine the annual inflation rate inpercent to two decimal places. b. Because inflation, like interest, is compounded from period to period (e.g., year to year), estimate the overall annual inflation rate per year from 2013 to 2017. Suggestion! Do not simply average the rates of part (a).
- The rate of inflation for 2016 was 1.3%. Did the price of Seattle Seahawks tickets exceed the inflation rate? ExplainSeahawks tickets 2015: $84.60Seahawks tickets 2016: $88.20Assume the consumer price index (CPI) in 2018 was 95, in 2019 the CPI was 100, and in 2020 the CPI was 105. The annual inflation rate in 2020 is: Select one: a. -5% b. 10% c. 5% d. None of the other options are correctYou purchase a certificate of deposit that pays an advertised rate of 2.30% interest per year. Your real rate of return if the actual inflation rate is 1.75% is ____% [round to the nearest hundredth of a percent].
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