A series of five constant-dollar (or real-dollar) uniform payment of $897.63 is made begining at the end of first year. Assume that the general inflation rate is 18.3% and the market interest rate is 18.3% during this inflationary period. The equivalent present worth of the series is:.

The equivalent present worth of the series is $4,182.21

Explanation:

Fix periodic payments for a specific period of time are annuity payment and the payments made at the start of each period is known as advance annuity.

As per given data

Inflation per year = 18.3% / 5 = 3.66%

numbers of period = 5 years

Payment per period = $897.63

Use following formula to calculate the present value of annuity payments

PV of annuity = P x ( 1 - ( 1 + r )^-n / r

Where

P = Payment per period = $897.63

r = rate in of interest = 3.66%

n = numbers of periods = 5 years

Placing values in the formula

Equivalent present worth of the series = $897.63 + $897.63 x ( 1 - ( 1 + 3.66% )^-(5-1) / 3.66% )

Equivalent present worth of the series = $4,182.21

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explanation:

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi