In 2016, you need $60000 a year to live comfortably.Assuming inflation remains at zero percent per year during the next 10 years, calculate the equivalent of $60,000 in 2026 dollars.
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In 2016, you need $60000 a year to live comfortably.Assuming inflation remains at zero percent per year during the next 10 years, calculate the equivalent of $60,000 in 2026 dollars.
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- A country is experiencing an inflation rate of exactly 100 percent per month for 4 months. At the end of 4 months, the price level has increased _____ times in relationship to the initial period.nflation causes things to cost more, and for our money to buy less (hence your grandparents saying "In my day, you could buy a cup of coffee for a nickel"). Suppose inflation decreases the value of money by 5% each year. In other words, if you have $1 this year, next year it will only buy you $0.95 worth of stuff. How much will $100 buy you in 20 years?$The price of oil is rising at 10% per year while inflation is just 2.5% per year. If the current price of oil is $45 per barrel, what would be the price of oil ten years from now in real dollars?
- An electronic device cost $1250 in 2011. If inflation has averaged 2% each year, what is the price of the device in 2018?A man deposited his first paycheck of $2000 into a long-term savings account at a bank at an interest rate of 12% in 1951 as a gift to his future grandchild. Assume a steady inflation rate of 8%. If his grandchild withdraws that money today in 2021, how much actual money did they withdraw? How much purchasing power would this withdrawal have in 1951?The cost of a NYC studio apartment was $1,200 in the year 2000. By 2022 the same apartment would rent for $2,000. Can we conclude from this data that rent has increased in NYC by 66.7% ? Yes, the inflation rate is 66.7% No, we cannot meaningfully compare nominal values through different points in time. Yes, the apartment is obviously more expensive No, we have not accounted for impovements in the quality of the apartment
- Michelle has won a prize that will pay her $1000 per year, starting one year from today,for 15 years. Inflation is expected to be 3% per year for the next 15 years, and her interest rate is 5% per year. What is the present value of this prize today? (Treat the 3% inflation as a negative 8, thus g = -3%, and i is 5%)Suppose Cho is a cinephile and buys only movie tickets. Cho deposits $3,000 in a bank account that pays an annual nominal interest rate of 10%. Assume this interest rate is fixed—that is, it won't change over time. At the time of her deposit, a movie ticket is priced at $15.00. Initially, the purchasing power of Cho's $3,000 deposit is 200 movie tickets. When the rate of inflation is equal to the interest rate on Cho's deposit, the purchasing power of her deposit __________over the course of the year. Select one of the following: A. Rises B. Remains the Same C. FallsIf the CPI was 110 last year and is 121 this year, what is this year’s rate of inflation? What is the “rule of 70”? How long would it take for the price level to double if inflation persisted at (a) 2, (b) 5, and (c) 10 percent per year?
- Someone with dollar bills to lend will never agree to make a loan with a nominal interest rate of less than zero because: The lender would not get any dollars back from the borrower The lender is better off keeping the dollars than to agree to such a loan O It is mathematically impossible for the interest rate to be negative It would not be fair to lend money under such conditions Suppose that inflation is expected to be at -3% per year for the foreseeable future. If the nominal interest rate is 0% per year, then the real interest rate is per year.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.If an investment has a nominal return of 3.8% per year, while the inflation is expected to be 3.6% per year, what would be its real return? What if the inflation is 4.2%?