Ten years ago, an item cost Php2,500. The rate of inflation for the first 4 years was 4%, during the next 3 years 6% and for the last 3 years 9%. Assuming that the increase in price were due to inflation alone, what is the average inflation rate during the 10 years?

Q: Find the cost of each item in 7 years, assuming an inflation rate of 8% (compounded continuously).…

A: Inflation rate (r) = 8% Mathematics constant (e) = 2.7183 (Always) Period (t) = 7  Years   Therefore…

Q: 1 year Treasury rates are 5%, while 2 year Treasury rates are 6%. What is the expected 1 year…

A: 1-year Treasury Stock, r1 = 5%2-year Treasury Stock, r2 = 6% Let 1-year Treasury Rate one year from…

Q: present value of $153,000 to be received in 14 years from today. Assume a per annum discount rate…

A: The present value of the amount can be computed as follows:- Present value= Amount/ (1+r)^n Amount =…

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Q: Annual expenses for two alternatives have been estimated on different bases as follows: If the…

A: Answer  -   Step 1 -  Calculation of Nominal Rate -  Formula - (1+RR) x (1+IR) -1 Given, Real rate -…

Q: Find the cost of each item in 7 years, assuming an inflation rate of 8% (compounded continuously).…

A: cost in 7 years = current cost * e^(inflation * time)

Q: In 2,009, the average price of a certain industrial material was SR 15.29 per liter. Suppose the…

A: Solution:- Inflation means the increase in prices of a commodity over a period of time.

Q: Find the cost of each item in 6 years, assuming an inflation rate of 7% (compounded continuously).…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: in year 0 of a uniform series of payments of $1,000 in years 2 thru 5 and another series of $2,000…

A: When a future cash flow is expressed as an equivalent value at today's worthiness based on the time…

Q: PROBLEM SOLVING A certain amount of money after a decade i 10,000.00. If the interest rate after the…

A: In this we need to find the present value of future value.

Q: What is the present value of $452,000 to be received in 6 years from today.  Assume a per annum…

A: Compound interest is one of the form of interest in which interest is charged on both principal as…

Q: What would be the purchasing power (in today's money) of $1,000 (actual $) in 10 years' time from…

A: Future value = fv = $1000 Time = t = 10 years Inflation rate = r  = 5%

Q: A certain amount of money after a decade is said to be worth Php 12,000.00. If the interest rate…

A: Future Value = 12,000 PHP 1 USD = 49 PHP Future Value in USD = 12,000 / 49 = 244.90 USD N = 10 years…

Q: A series of twenty-one constant-dollar payments beginning with $5,000 at the end of the first year…

A: If inflation is deducted from the nominal interest rate then real interest rate is derived. This…

Q: have

A: Let assume today price = A= $200, Inflation R =1.38%, per annum, no of years for the sum inflated…

Q: CD interest rates vary significantly with time. They hit a historical high in 1981, when the average…

A: CD are the certificate of deposits that are used for short term financing purpose. These deposits…

Q: Say you own an asset that had a total return last year of 10.4 percent. If the inflation rate last…

A: Solution- 1+Nominal inrerest rate=1+ Real interest rate×1+Inflation rate

Q: A series of five payments in constant dollars, beginning with $6,000 at the end ofthe first year,…

A: The current value of the cash flows or an asset after discounting is termed as the present worth.

Q: 5a. Consider the data in the table below. The inflation rate is 6% and the before-tax market…

A: Inflation refers to the increase in the prices prevalent in an economy over time. The actual-dollar…

Q: With an annual inflation rate of 2.39%, how much did an item that now costs $5800 cost 9 years…

A: Future value is computed by following formula:-FV = PV * (1+r)nwhereFV = future valuePV = present…

Q: At 9% per year simple interest, $1000 is equivalent to $1270 in three years. Define the symbols for…

A: Interest charged on the principal amount at a fixed rate for a fixed period of time is known as…

Q: The average inflation rate in Canada is 3% per year. It means that purchasing power of $1 decreases…

A: the total decrease in the purchasing power of money in 10 years when in n  years the decrease is…

Q: Say you own an asset that had a total return last year of 17 percent. Assume the inflation rate last…

A: The inflation rate refers to the rate at which the value of the currency decreases over time and the…

Q: An item that currently costs $900 would have cost $4 years ago. (Do not round until the final…

A: We can determine the cost of the item using the formula below:

Q: A certain amount of money after a decade is said to be worth Php 10 000.00. Ifthe interest rate…

A: In this we need to find out the present value in dollars.

Q: Between the years 1974 and 1984​, the average annual inflation rate was 3​%. Find the salary in the…

A: Inflation refers to a rise in the price level over a period of time. This changes the present worth…

Q: Your aunt's $10,000 investment earned a nominal 7% last year. If the inflation rate was 3.75%, what…

A: Nominal rate (r) = 7% Inflation rate (i) = 3.75%

Q: If the inflation rate is expected to be 3% for the next 10 years, what annual income will be needed…

A: Expected inflation rate is 3% Time period is 10 years Current Annual Income "Present Value" is…

Q: A deposit of $1000 is made into an account that promises a minimum of 2% per year increase in…

A: The minimum value that will be in account at year 3 = Deposit amount *(1.02)^3 * (1.03)* (1.01)…

Q: What is the present worth of a uniform series of 10 payments that begin one year from now in the…

A: Present Value is the amount of money's worth on the present day which to be received/paid in future,…

Q: Your investments increased in value by 16.3 percent last year, but your purchasing power increased…

A: Percentage of Increase in Value = 16.3%Percentage of Increase in Purchasing Power = 7.5%

Q: You deposited $10,000 today into a saving account for 5 years with a market rate of 8% per year. The…

A: Deposit amount = $ 10000 Period = 5 Years Interest rate = 8% Inflation rate = 2%

Q: Suppose that your salary is $35,000 in year one, will increase at 6% per year through year 4, and is…

A: A salary is a regular payment an employer makes to an employee that is specified in an employment…

Q: PROBLEM SOLVING: A certain amount of money after a decade is said to be worth Php 10,000.00. If the…

A: In this we need to calculate the present value of future value.

Q: Suppose the effective rate of interest is 4% per annum during 2010 and 2011, and 2.4695% per half…

A: The idea of money's time worth holds that an amount of money is worth greater now than it will be at…

Q: What is the effective rate of interest if Php12,000 accumulates Php30,000 in 10 years with interest…

A: Solution: Present value (PV)       12,000.00 Future value (FV)       30,000.00 Period (Nper)…

Q: Find the cost of each item in 5 years, assuming an inflätion Fate Ul (a) cup of coffee, $3.75 24 (b)…

A: Cost of each item will be future value of present cost  future value with continuous compounding =…

Q: A lot purchased for $4,500 is held for five years and sold for $13,500. The average annual property…

A: Long Term Capital gain is the gain on sale of property held for more than 2 years. It is the…

Q: Find the cost of each item in 8 years, assuming an inflation rate of 9% (compounded continuously).…

A: Formula for  continuously compounded interest is : P (t) = Po * ert where  P (t) = Value at time t…

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”.