Contemporary Engineering Economics (6th Edition)
Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 11, Problem 12P
To determine

Calculate the actual and constant dollar.

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You are saving to buy a car which in 2022 costs $30,000. You intend to make 36 equal consecutive payments to an account starting one month from now. The interest rate is .5% per month, compounded monthly. If the inflation rate is 4% per year compounded annually, how much in actual dollars should the periodic payments be.
The inflation rate over a 10-year period for an item that now costs $1000 is shown in the following table. (a) What will be the cost at the end of year10? (b) Do you get the same cost using an average inflation rate of 5% per year through the 10-year period? Why?
The current gasoline price is 5$ per gallon, and it is projected to increase next year by 5%, 8% the following year, and 3 % the third year. What is the average inflation rate for the projected gasoline price for the next three years
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