If land was purchased for $600 per acre and the real price of land increases at 4% each year. The marginal tax rate is 8% and the inflation rate is 3%. The land will be sold in five years. What will the real land price be at the time of the sale? $881.60 O $695.56 O $729.99 O None of the answers are correct

"An annuity provides for 15 consecutive end-of-year payments of $73,000 in actual dollars. The general inflation rate is 5% annually, and the inflation-free interest rate is 5% annually. What is the present value of the annuity after considering the effects of inflation?"

b. The price of a product was $0.88 in the year 2008 and $1.28 in the year 2018. What is the average annual inflation rate for this product?   (ANSWER CHOICES: 3.82 % or 3.68 % or 3. 98% or 3.42%)   c. If the CPI for January 2008 is 208.837 and the CPI for December 2018 is 255.539, what is the average annual inflation rate (per year) from Jan 2008 to Dec 2018? (Hint: Calculate monthly inflation rate and then use annual effective interest rate)   (ANSWER CHOICES: 1.75% or 1.85% or 1.95% or 1.65%)

The incredible shrinking $50 bill in 1957 was worth $50, but in 2007 it is worth only $6.58. Solve, a. What was the compounded average annual inflation rate (loss of purchasing power) during this period of time? b. Fifty dollars invested in the stock market in 1957 was worth $1,952 in 2007. In view of your answer to Part (a), what was the annual real interest rate earned on this investment?

A person's savings eams an effective annual rate of return of 9%. Income tax is paid on the interest earned at a rate of 55%. If the inflation rate is 3% per year, what is the annual after-tax real rate of return? Answer as a percentage, correct to 2 decimals.

Samantha receives a starting salary offer of $60,000 for Year 1. If inflation is 3% each year, what must her salary be to have the same purchasing power in Year 10? Year 20? Year 30? Year 40?

Suppose that you buy a TIPS (inflation - indexed) bond with a 2-year maturity and a (real) coupon of 4.1% paid annually. If you buy the bond at its face value of $ 1,000, and the inflation rate is 8.15% in each year. What will be your cash flow in year 1? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. What will be your cash flow in year 2? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. What will be your real rate of return over the two-year period? Note: Enter your answer as a percent rounded to 1 decimal place.

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?

If the annual inflation rate in an economy is i, then $1 borrowed at the beginning of a year will have the same purchasing power as ________ dollars at the end of the year. i (1/i) (1 − i) (1 + i)

You and your spouse just adopted twin girls, little Heather and Beth. You want to make sure they are taken care of for the next 22 years.  (A)Based on the following information, how much life insurance needs to be purchased for the husband using the income approach, if any?  (B) How much, if any, needs to be purchased for the wife using the income approach?   Assume 3% inflation rate.                Market Labor Value Household Production Value Husband $72,000 $15,000 Wife $15,000 $40,000