Over the next year, the inflation rate will be 6%, while the nominal interest rate is 2% per year. What is the real value of $1,000 received one year from now? (That is, what amount of money now gives you the same purchasing power as $1000 in one year.) Round to two decimal places and do not enter the $ sign. If your answer is $1.333, enter 1.33. If your answer is $1.666, enter 1.67. If appropriate, remember to enter the - sign.

Over the next year, the inflation rate will be 6%, while the nominal interest rate is 2% per year. What is the real value of $1,000 received one year from now? (That is, what amount of money now gives you the same purchasing power as $1000 in one year.) Round to two decimal places and do not enter the $ sign. If your answer is $1.333, enter 1.33. If your answer is $1.666, enter 1.67. If appropriate, remember to enter the - sign.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter22: Inflation

Section: Chapter Questions

Problem 37P: Rosalie the Retiree knows that when she retires in 16 years, her company will give her a one-time...

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Rosalie the Retiree knows that when she retires in 16 years, her company will give her a one-time payment of 20,000. However, if the inflation rate is 6 per year, how much buying power will that 20,000 have when measured in todays dollars? Hint: Start by calculating the rise in the price level over the 16 years.
Assume "this year" is the base year used in calculating the CPI. Over the next year, the inflation rate will be 9.3%, while the nominal interest rate is 1.2% per year. What is the real value of $2,000 received one year from now? (That is, what amount of money now gives you the same purchasing power as $2,000 in one year.) Do not write the dollar ($) sign, and use a minus (-) in front of a decrease. Round your answer to one (1) decimal.
How much money can the Eastman Land and Cattle Company afford to spend now for a tractor trailer in lieu of spending $69,000 three years from now, if the interest rate is 13% per year and the inflation rate is 6.1% per year? NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. Solve by factors. The Eastman Land and Cattle Company can afford to spend $ .
Goods costing $27.10 at the beginning of the year 1940 cost $176.52 at the beginning of the year 1979. Find the average annual inflation rate over this time period. Express your answer the nearest thousandth of a percent.
QUESTION 9 If total inflation over 18 years is 17.3%, what is the annual inflation rate? Write the answer in percent terms with up to two decimals (e.g., 10.22 for 10.22%, or 2.33 for 2.33%).
You lend $1,012 to a friend and he agrees to pay you back next year plus he will pay you interest of 7.25%. If the inflation rate is 2.18%, then in real terms how much extra money will you have after your friend pays you back? Enter a number rounded to two decimal places with no other characters.
The following table shows the annual inflation rates in several Latin American countries in October 2015 (unless otherwise noted). Assume that the rates shown continue indefinitely. Country Argentina Brazil Bolivia Nicaragua Venezuela Mexico Uruguay Currency Peso Real Boliviano Gold cordoba Bolivar Peso Peso Inflation Rate(%) 14.3 9.9 4.3 3.0 68.5 2.5 9.2 If an item in Brazil now costs 300 reals, what do you expect it to cost 7 years from now? (Round your answer to the nearest real.) reals
If the Consumer Price Index was 208.5 on January 1, 2010, and 10 years after it was 516.71. What was the inflation rate, compounded annually, over that 10-year period? If that rate continues to hold for the next 10 years, what Consumer Price Index can be expected on January 1, 2030?
The cost of first-class postage has risen by about 5% per year over the past 30 years. The U.S. Postal Service introduced a one-time forever stamp in 2008 that cost 41 cents for first-class postage (one ounce or less), and it will be valid as first-class postage regardless of all future price increases. Let’s say you decided to purchase 1,000 of these stamps for this one-time special rate. Assume 5% inflation and your personalMARR is 10% per year (im). Did you make a sound economical decision?
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 $500 $600 Jersey $100 $120 Food $150 $150 Transport $50 $80 Calculate the inflation rate for Henrique's baseball season between year 1 and 2.
In 1923, a certain country underwent one of the worst periods in history of hyperinflation, which is extraordinarily large inflation in prices. At the peak of the hyperinflation, prices rose 34,000% per month. At this rate, by what percentage would prices have risen in 1 year? In 1 day? (Assume 30 days per month.) The annual inflation rate is ×10%. (Type whole numbers.) The daily inflation rate is nothing%. (Round to the nearest whole number as needed.)
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.