Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 11, Problem 5P
To determine
Calculate the time period.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Because of general price inflation in our economy, the purchasing power of the dollar shrinks with the passage of time. If the average general inflation rate is expected to be 8% per year for the foreseeable future, how many years will it take for the dollar's purchasing power to be one-third of what it is now?
A man deposited his first paycheck of $2000 into a long-term savings
account at a bank at an interest rate of 12% in 1951 as a gift to his
future grandchild. Assume a steady inflation rate of 8%. If his
grandchild withdraws that money today in 2021, how much actual
money did they withdraw? How much purchasing power would this
withdrawal have in 1951?
Over the last 10 years, the average rate of inflation has been 1.61%. what is the purchasing power of a dollar today in terms of what a dollar could purchase in 2008?
Chapter 11 Solutions
Contemporary Engineering Economics (6th Edition)
Ch. 11 - Prob. 1PCh. 11 - Prob. 2PCh. 11 - Prob. 3PCh. 11 - Prob. 4PCh. 11 - Prob. 5PCh. 11 - An annuity provides for 10 consecutive end-of-year...Ch. 11 - Prob. 7PCh. 11 - Prob. 8PCh. 11 - Prob. 9PCh. 11 - Prob. 10P
Ch. 11 - Prob. 11PCh. 11 - Prob. 12PCh. 11 - Prob. 13PCh. 11 - Prob. 14PCh. 11 - Prob. 15PCh. 11 - Prob. 16PCh. 11 - Prob. 17PCh. 11 - Prob. 18PCh. 11 - Prob. 19PCh. 11 - Prob. 20PCh. 11 - Prob. 21PCh. 11 - Prob. 22PCh. 11 - Prob. 23PCh. 11 - Prob. 24PCh. 11 - Prob. 25PCh. 11 - Prob. 26PCh. 11 - Prob. 27PCh. 11 - Prob. 28PCh. 11 - Prob. 29PCh. 11 - Prob. 30PCh. 11 - Prob. 31PCh. 11 - Prob. 1STCh. 11 - Prob. 2STCh. 11 - Prob. 3ST
Knowledge Booster
Similar questions
- The price of oil is rising at 10% per year while inflation is just 2.5% per year. If the current price of oil is $45 per barrel, what would be the price of oil ten years from now in real dollars?arrow_forwardFind the time it would take for the general level of prices in the economy to double at an average annual inflation rate of 2.3%.arrow_forwardYou purchase a certificate of deposit that pays an advertised rate of 2.25% interest per year. What is your nominal rate of return if the actual inflation rate is 1.65%? ○ -0.6% ○ 2.25% ○ 1.65% ○ 0.6%arrow_forward
- Hyperinflation has struck your country! Over the past year the price of a loaf of bread has increased from $2 to $52,858. What is the annual rate of inflation suggested by this increase? Put your answer in percentage form (e.g. 30.57 not 0.3057) and then round to two decimal places.arrow_forwardHelp!!!!arrow_forwardIf the average inflation rate is 4.5%, how long before prices exactly double?arrow_forward
- Lucy is tempted to buy 200 apples, with each one costing $2. However, she realizes that if she saves the money in a bank account she should be able to buy 240 apples. If the cost of the an apple increases by the rate of inflation, i.e. 8%, according to the Fisher equation, how much would the nominal rate (%) of the return on the bank account have to be?arrow_forwardSuppose you have $200,000 in a bank term account. You earn 5% interest per annum from this account. You anticipate that the inflation rate will be 4% during the year. However, the actual inflation rate for the year is 6%.arrow_forwardAn investment offers a total return of 13.8 percent over the coming year. You believe the total real return will be only 9.4 percent. What do you believe the exact inflation rate will be for the next year?arrow_forward
- Find the time it would take for the general level of prices in the economy to double at an average annual inflation rate of 3.1%. What is the appropriate value of i? i= (Type an integer or a decimal.)arrow_forwardAssume inflation is expected to be 6% over the next year. What nominal interest rate would you require from the bank over the next year? How much money will you have at the end of one year? If you are saving to buy a stereo that currently sells for $1,125, will you have enough to buy it? you just deposited $1,000 into a bank account. The current real interest rate is 3% andarrow_forwardJeff just received a refund of $2,178 from his family physician. This was anoverpayment on his account, and it has been three years since the overpayment was due. Jeff is really frosted by this delay! What is the purchasing power now (year 0) of the overpayment if inflation has been 4%, 3%, and 2%, respectively, in years −3 (three years ago), −2 (two years ago), and −1 (last year)?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
