Suppose Julie's salary went from $35,000 to $150,000 in 12 years. a. Assuming she got the same percentage raise each of those five years, show how to calculate that rate (r%). b. Assuming that inflation was about 3% per year for those five years, by what percent did Julie's "purchasing power" increase? Explain what you think "purchasing power" means.
Suppose Julie's salary went from $35,000 to $150,000 in 12 years. a. Assuming she got the same percentage raise each of those five years, show how to calculate that rate (r%). b. Assuming that inflation was about 3% per year for those five years, by what percent did Julie's "purchasing power" increase? Explain what you think "purchasing power" means.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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![8.
Suppose Julie's salary went from $35,000 to $150,000 in
12 years.
a. Assuming she got the same percentage raise each of those five
years, show how to calculate that rate (r%).
b. Assuming that inflation was about 3% per year for those five
years, by what percent did Julie's "purchasing power" increase?
Explain what you think "purchasing power" means.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F696172ab-96c0-4ae1-beb4-7c38ed84771c%2F1228c1e6-2db9-46e4-a148-ab21cff35174%2Fojfbki_processed.png&w=3840&q=75)
Transcribed Image Text:8.
Suppose Julie's salary went from $35,000 to $150,000 in
12 years.
a. Assuming she got the same percentage raise each of those five
years, show how to calculate that rate (r%).
b. Assuming that inflation was about 3% per year for those five
years, by what percent did Julie's "purchasing power" increase?
Explain what you think "purchasing power" means.
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