The uninflated present worth of Php 165,000.00 becomes Php 250,000 with 8% interest compounded annually after 5 years. Find the average inflation rate.
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- An engineer who is now 65 years old began planning for retirement 40 years ago. At thattime, he thought that if he had $1 million when he retired, he wouldhave more than enoughmoney to live his remaining life in luxury. Assume the inflation rate over the 40-year timeperiod averaged a constant 3.7% per year.a) What is the CV purchasing power of his $1million at age 65? (Hint: Use the day he started 40 years ago as the base year.)b) How manyfuture dollars should he have accumulated over the 40 years to have a CV purchasing powerequal to $1.3 million at his current age of 65?A man wishes to set aside money for his retirement at the age 65 in a fund which will have an amount equivalent to P60k with today’s purchasing power. The estimated inflation rate is 7.5%. If the fund will earn 8% compounded annually what amount should he invest now on his 40th birthday?A bicycle tire company performed a web-based study of a popular tire retail price over time. The study indicated that price is set at $16.00 per tire, it was expected to increase to $19.00 over the next 5 years. a. Determine the annual rate of inflation over 5 years to increase the price from $16.00 to $19.00. b. Determine the market interest rate that must be used in economic equivalence computations if inflation is considered and real 8% per year interest rate is expected.
- A company is planning to invest $500,000 in a new business opportunity. The current inflation rate in the country is 1.3 % per quarter. If the company has the policy of maintaining the purchasing power of their invested dollars and also earn 10% real interest rate per year, (a) to what Future Dollars value the invested $500,000 should grow in 5 years? (b) Calculate the purchasing power of the amount you found in part a) in terms of Today's Dollars.The average cost of a gallon of gas was $0.80 per gallon in 1995. In 2011, theaverage cost of a gallon of gas is $3.50. What is the average inflation rate for the period 1998-2011?A professional athlete signs a two-year contract in which the earnings c can be modeled by 2,400,000+ 500,000t, where t represents the year (a) Find the actual value of the athlete's contract in dollars. (b) Assuming an annual inflation rate of 3%, what is the present value of the contract in dollars? (Round your answer to the nearest cent.) $ Need Help?
- A bicycle tire company performed a web-based study of a popular tire retail price over time. Thestudy indicated that price is set at $16.00 per tire, it was expected to increase to $19.00 over thenext 5 years.a. Determine the annual rate of inflation over 5 years to increase the price from$16.00 to $19.00. b. Determine the market interest rate that must be used in economic equivalencecomputations if inflation is considered and real 8% per year interest rate isexpected.A renewable energy industry is one of the promising sectors in future and play a major role in the vision 2030. If a specialized company in energy planning to upgrade their equipment now to meet future demand at cost of $200.000 or they purchase the upgrade package three years from now at cost of $300,000. Assume that the minimum attractive rate of return is 12% per year and the inflation is 3% per year. If the company decided to purchase the upgrade 3 years from now without considering inflation what will be the cost?A small scale mining investment is expected to generate $60,000 per year in profits over the next 15 years. If these profits are invested in a mutual fund account that earns a market interest rate of 18% per year, calculate how much the fund will be worth after the 15 years in actual dollars and in real dollars. Inflation is expected to average 6% per year over that period. Click the icon to view the interest and annuity table for discrete compounding when i = 6% per year. Click the icon to view the interest and annuity table for discrete compounding when i = 18% per year. In actual dollars: OA. $2,118,010 B. $6,625,790 OC. $3,657,920 OD. $1,526,320 In real dollars: OA. $6,625,790 B. $2,118,010 OC. $1,526,320 OD. $3,657,920
- If inflation averages 2.5% each year from 2015 to 2025, what is the purchasing power in 2015 dollars of $75,000 in 2025A renewable energy industry is one of the promising sectors in future and play a major role in the vision 2030. If a specialized company in energy planning to upgrade their equipment now to meet future demand at cost of $200,000 or they purchase the upgrade package three years from now at cost of $300,000. Assume that the minimum attractive rate of return is 12% per year and the inflation is 3% per year. If the company decided to purchase the upgrade 3 years from now considering inflation what will be the cost?A small scale mining investment is expected to generate $40,000 per year in profits over the next 12 years. If these profits are invested in a mutual fund account that earns a market interest rate of 10% per year, calculate how much the fund will be worth after the 12 years in actual dollars and in real dollars Inflation is expected to average 4% per year over that period Click the icon to view the interest and annuity table for discrete compounding when /=4% per year Click the icon to view the interest and annuity table for discrete compounding when /= 10% per year. In actual dollars OA. $534,260 OB. $665,770 OC. $855,370 OD. $1,117,980 In real dollars OA. $534,260 OB. $855,370 OC. $1,117,980 OD $665,770 CETTE