Not use ai please Problem 6A father is planning to invest $280,000 in an investment fund that promises to make 8% peryear when the inflation is 3% per year to have enough money to pay the college fees for hisnewborn child. How much (in then-current dollars) will have to be in the account after 18years?

The issue is to determine the sum of money that would be required after 18 years with the respect to…

Answered: Problem 6 A father is planning to…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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An economist has predicted that during the next 12 years, prices in the U.S. will increase 55%. He expects a further increase of 25% in the subsequent 8 years. Compute the annual inflation rate, f, for the entire 20-year period.
5
Typically, how is inflation measured? daily weekly monthly quarterly annually
A newspaper reports that in the last 8 years, prices have increased a total of 45%. This is equivalent to what annual inflation rate, compounded annually?
Your company borrows $800,000 and will pay it back at 10% APR of real interest compounded monthly. The payments will be adjusted to account for 4% annual inflation on top of the real interest required. You have arranged to make payments every 6 months for 5 years. What will your payments be? Use the Inflation adjusted method.
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You would like to buy a house that is currently on themarket at $85,000, but you cannot afford it right now. However, you think that youwould be able to buy it after 5 years. If the expected inflation rate as applied to the priceof this house is 7% per year, what is its expected price after four years?
You would like to buy carcar t is currently on themarket at $85,000, but you cannot afford it right now. However, you think that youwould be able to buy it after 4 years. If the expected inflation rate as applied to the priceof this car is 6% per year, what is its expected price after 4 years?
John borrowed $7,000 from a commercial bank for 6 years to pay his tuition fee. Calculate the interest owed on this loan after 6 years in real dollars if the bank charges 7% annual (current) interest rate and annual inflation is 3%.
3. A man deposits P50,000 in a bank account at 6% compounded monthly for 5 years. If the inflation rate of 6.5% per year continues for this period, will this effectively protect the purchasing power of the original principal?
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QUESTION-2 Someone calculated the-future worth of his investment in term of today's dollars. The obtained result was $/945.89s, The life of the investment is expected to be 20 years. The average annual inflation rate along this period is 7%. If it is known that the investor earns 149% per year from this investment, what is the first cost of the investment?

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Problem 6 A father is planning to invest $280,000 in an investment fund that promises to make 8% per year when the inflation is 3% per year to have enough money to pay the college fees for his newborn child. How much (in then-current dollars) will have to be in the account after 18 years?