problemset08

problemset08 - ECN801 Problem Set 8 Chapter 14, Problem 2....

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
ECN801 – Problem Set 8 Chapter 14, Problem 2. What is the inflation rate if something costs exactly twice as much as it did 10 years earlier? Chapter 14, Problem 4. Convert $10,000 present dollars into then-current dollars of year 10 if the inflation rate is7% per year. Chapter 14, Problem 5. Convert $10,000 future dollars in year 10 into constant-value dollars (not equivalent dollars) of today if the inflation-adjusted (market) interest rate is 11% per year and the inflation rate is 7% per year. Chapter 14, Problem 6. Convert $10,000 future dollars in year 10 into constant-value dollars (not equivalent dollars) today if the inflation-adjusted (market) interest rate is 12% per year and the real interest rate is 3% per year. Chapter 14, Problem 7. Estimated costs for maintenance and operation of a certain machine are expected to be$13,000 per year (then-current dollars) in years 1 to 3. At an inflation rate of 6% per year, what is the constant- value amount (in terms of today’s dollars) of
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/24/2011 for the course CPS 125 taught by Professor Panzer during the Winter '11 term at Ryerson.

Ask a homework question - tutors are online