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Compute the purchasing power gain or loss for the year

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A firm has a net monetary liability balance of $10,000 on January 1, 2001. During the first third of the year, the balance decreased to $7,500. During the second third of the year, the balance increased to $12,500. During the last third of the year, the balance increased to $20,000. The general price index was 100 during the first third of the year, 110 during the second third, and 106 during the last third. Compute the purchasing power gain or loss for the year.

Reference no: EM13319796

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