If the real discount rate is 8% and the inflation rate is 8%, what is the interest rate that will be used to find the present worth of a series of cash flows that are in then-current dollars? %
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- 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)Over the last 10 years, the average rate of inflation has been 1.51%. What is thepurchasing power of a dollar today in terms of what a dollar could purchase in 2012?Interest RatesSuppose that you make a loan of $1,500 to your friend at a rate of 10% interest because you expect the inflation rate to be 5%.a) By how much does your purchasing power increase once the loan is completely paid off?b) Assuming that after the loan was repaid, you discovered that inflation rate over the life of the loan was only 2%. Who gained?
- 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.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.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.
- Krystyna has a long-term consulting contract with an insurance company that guarantees her $24,000 per year for five years. She believes inflation will be 2 percent this year and 6 percent next year and then will stay at 10 percent indefinitely. Krystyna's real MARR is 12 percent. What is the present worth of this contract? The present worth of the contract is about (Type an integer or decimal rounded to two decimal places as needed.)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?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%).
- If an investment of P24,500 twenty-four years ago is now worth P55,000, at what rate, compounded semi-annually, did it earn? What is the nominal rate, effective rate and real interest rate if inflation is 4.6% (base rate: nominal interest rate)?(show ur solution)QUESTION 4 If you deposit $10,000 in a bank account that pays a 5% interest compounded monthly for threeyears, what would be your economic loss if the general inflation rate is 6% during that period? when the general inflation rate %. (Round to three decimal places.) You will lose $ 549 a. The effective annual interest rate for the deposit is 5.116 is 6%. (Round to the nearest dollar.)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