What is the cost in real dollars today of spending $100,000 two years from now if your MARR = 5% and the general inflation rate is 4% per year.? a. $52K b. $62K c. $72K d. $82K e. $92K
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- 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. $445A 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.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?
- Provided the inflation rate is f percent per year, to determine the purchasing power of $10,000 ten years from now, the $10,000 must be:a. divided by (1 + f )10b. multiplied by (1 + f )10c. divided by (1+ 0.10) fd. divided by (1 + f )You just made an investment in an insurance policy that is guaranteed to pay you $2.6 million 20 years from now provided you live that long.What will be the purchasing power of that amount with respect to today's dollars if the market interest rate is 8% per year and the inflation rate stays at 3.7% per year over the 20-year period?The purchasing power of this amount is. Please answer correct calculation asap plz Don't answer by pen paper plzb. The price of a product was $0.88 in the year 2008 and $1.28 in the year 2018. What is the average annual inflation rate for this product? (ANSWER CHOICES: 3.82 % or 3.68 % or 3. 98% or 3.42%) c. If the CPI for January 2008 is 208.837 and the CPI for December 2018 is 255.539, what is the average annual inflation rate (per year) from Jan 2008 to Dec 2018? (Hint: Calculate monthly inflation rate and then use annual effective interest rate) (ANSWER CHOICES: 1.75% or 1.85% or 1.95% or 1.65%)
- Assume a constant inflation rate of 5% annually and 0% interest rate. Over a whole period of 14 years. A real estate investment after 4 years would consume 307,500$. Lasting to 10 years the income is a constant of 170,000$ each year. A) What would be the equivalence selling price for the real estate in year 0?Required information In wisely planning for your retirement, you invest $34,000 per year for 20 years into a 401K tax-deferred account. Assume you make a real return of 10% per year when the inflation rate averages 3.3% per year. How many future dollars will you have in the account immediately after your last deposit? You will have $ | future dollars in your account immediately after your last deposit.1. Consider a real return bond with a face value of $15,000 and a coupon yield of 5.2%. What is the coupon payment after one year if the inflation rate is 6.8%? Select one: Ia) $817.44 b) $833.04 c) $825.24 d) $809.64
- 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)Price per Unit Units Produced 2007 2008 2009 2010 Blueberries 8 $2 $2 $2.1 $2.4 Pineapples 5 $2 $2.5 $2.5 $3 Cheese $2.5 $3 $3.5 $4 If 2008 is the base year, the inflation rate between 2009 and 2010 is Select one: Oa. 17.1% Ob 13.9% C. 16.1% Od. 10.4% 3.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