9.3 (LG 9.1, 9.2) Find the present worth today in real value corresponding to the cur- rent values shown below for a 4 percent inflation rate and a 4 percent interest rate. a. $400 three years from now b. $400 three years ago c. $10 next year
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the answer to this question is Q9.3=, a = $316.12, b = €506.16, c = $9.24, d = $160 182, e = £1.659 x 10^34,
f = $0.06
we just need to find how we get that answer for this question, please help NO EXCEL
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- The index number representing the price level changes from 110 to 115 in one year and then from 115 to 120 the next year. Since the index number increases by five each year, is five inflation rate each year? Is the inflation rate the same each year? Explain your answer.Henrique is a baseball fan and attends several games per season. His expenses per season are listed in the table below: |Year 1 |Year 2 5 Baseball Tickets Jersey Food Transport $500 $600 |$100 $150 $50 |$120 $150 $80 Calculate the inflation rate for Henrique's baseball season between year 1 and 2. 18.5% O0.18% 15.8% O1.6%Year | price of meat (per Kg) price of bread (per Kg) price of gas (per lt) housing price (monthly rent of 1 bd unit) $10 $20 S1.5 S1000 $12 S18 S1.5 $1200 Suppose a consumer basket consists of 40 Kg meat, 50 Kg bread, 400 It gas, and a one bedroom apartment for one year. Using the table above, compute the inflation rate in this economy based on CPI between years 1 and 2. 10% 12% 6% 17%
- 4.26 A couple wants to save for their daughter's college expense. The daughter will enter college eight years from now, and she will need $50,000, $51,000, $52,000. and $53,000 in actual dollars for four school years. Assume that these college payments will be made at the beginning of each school year. The future general inflation rate is estimated to be 7% per year, and the annual inflation-free inter- est rate is 6%. (a) What is the market interest rate to use in the analysis? (b) What is the equal amount, in actual dollars, the couple must save each year until their daughter goes to college?Year price of meat (per Kg) price of bread price of gas (per Kg) (per It) housing price (monthly rent of 1 bd unit) $1000 1 $10 $20 $1.5 2 $12 $18 $1.5 $1200 Suppose a consumer basket consists of 40 Kg meat, 50 Kg bread, 400 It gas, and a one bedroom apartment for one year. Using the table above, compute the inflation rate in this economy based on CPI between years 1 and 2. 17% 12% 6% 10%1.2. The cost of construction material for large infrastructure projects are reportedly rising at an annual rate that is twice the general inflation rate. The current inflation rate is running at 7.5% per year. In 5 years, how much greater will construction costs be compared with costs for other industries that increase at exactly the 6% general inflation rate?
- Suppose you lent money to a friend a few years ago at a nominal interest rate of 6%. At the time ot he loan, you expected the annual inflation rate to be 2%, but the actual annual inflation rate was 1.2%. When the loan originated, you expected to earn a real return of but due to unexpected disinflation, you earned an actual real return of A. 2%; 1.2% OB. 4.8%; 6% C. 6%; 4.8% D. 4%; 4.8%The following table lists the per gallon prices of gas and milk for the months of April, May, and June. Assume that the typical consumer buys 60 gallons of gas and 4 gallons of milk each month, and that April is the base period. Month April May June Price of Gas (Dollars per gallon) 2.00 60.1% Refer to Table 25-3. What is the inflation rate for May? 67.2% -4.1% 10% 3.50 3.85 Price of Milk (Dollars per gallon) 3.50 3.52 3.58Shea is pricing materials (wood, wire, pipe, etc.) for new home construction on a “per unit” basis. Inflation on materials has been running at 16.0% for the past 3 years and is expected to remain at that rate for the next 10 years. The actual dollars paid for expenses at the end of year 3 for a “unit” are $55,000. Solve, a. What did the same set of materials cost 3 years ago? b. If the trend continues, what will they cost 10 years from now?
- An annuity pays $1100 per year for 13 years Inflation is 6 percent per year a. If the real MARR Is 8 percent, what is the current dollar MARR? b. Using the current dollar MARR from part (a), calculate the present worth of the annuity a. The current dollar MARR is percent (Type an integer or decimal rounded to two decimal places as needed) b. The present worth of the annuity is S (Type an integer or decimal rounded to two decimal places as needed)Suppose that you borrow $20,000 at 12%, compounded monthly, over 5 years. Knowing that the 12% represents the market interest rate, the monthly payment in actual dollars will be $444.90. If the average monthly general inflation rate is expected to be 0.5%, what is the equivalent equal monthly payment series in constant dollars? A. $386 B. $486 C. $345 D. $445If the Consumer Price Index (CPI) for one year was 150 and for the next year it was 157.5, the inflation rate from one year to the next is % 6.5% 5 5.0% 7.5% O 6.0% 16 < 4- 6 f7 4+ & 7 hp fg KAA 8 fg DII 9 f10 W DDI