Compute the inflation rate

Assignment Help Business Economics

Reference no: EM131810587

An economist has predicted that during the next 6 years, prices in the U.S. will increase 55%. He expects a further increase of 25% in the subsequent 4 years, so that prices at the end of 10 years will have increased to 180% of the present level. Compute the inflation rate, f , for the entire 10-year period.

Reference no: EM131810587

Questions Cloud

Expected annual inflation rate : If the expected annual inflation rate for the next several years is 6%, what interest rate i should be used in project analysis calculations?

High rate of inflation : A South American country has had a high rate of inflation. Recently, its exchange rate was 15 cruzados per dollar; that is, one dollar will buy 15 cruzados

Determining the fuel consumption : The manufacturer believes that the fuel consumption for its new cars should decline as fuel prices increase to keep the fuel costs constant.

Calculate the increase in company proof : Calculate the increase in company proof its if Glenn Company accepts the outside suppliers offer.

Compute the inflation rate : Compute the inflation rate, f , for the entire 10-year period.

Calculate the selling price per unit charged by the outside : Calculate the selling price per unit charged by the outside supplier that would make Glenn economically indifferent between making and buying the motor.

What rate of return is sally receiving on the loan : After taking inflation into account, what rate of return is Sally receiving on the loan? Compute your answer to the nearest 0.1%.

Determining the real rate of return : You want a real rate of return of 5%, and you estimate inflation will average 6% per year. Should you buy the annuity?

Why gms would use different overhead rates for assembly : Calculate each of the predetermined overhead rates for the GMS departments. Briefly explain why GMS would use different overhead rates for Assembly and Testing.

User Account

All Pages