In 1982 the inflation rate hit 16%. Suppose that the average cost of a textbook in 1982 was $25. What was the expected cost in the year 2017 if we project this rate of inflation on the cost? (Assume continuous compounding. Round your answer to the nearest cent.) $4 If the average cost of a textbook in 2012 was $200, what is the actual inflation rate (rounded to the nearest tenth percent)? %

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Q: have

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A: Compute the nominal interest rate: Nominal interest rate is calculated by using following formula:

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A: The real rate of return is calculated in the following manner:

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Interest Rate

When you deposit your money with the bank, the deposit earns you some extra money at the end of the specific period – something more than what you deposited. That amount of money that the bank pays you for keeping the money with the bank is the “interest” and the percentage at which the bank pays you for your amount is called the “interest rate”.