Define the inflation rate and its relation to the consumer

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1. A water heater needs to be replaced after 20 years of operation at a cost of $1,000. What amount must be deposited today with 1% interest so that one can buy the replacement boiler after 20 years? How much should the interest rate be on a deposit of $500?

2. Define the inflation rate and its relation to the consumer price index.

Reference no: EM131285826

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