ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
Chapter 14, Problem 48P
To determine
To find: The present worth of the payments at the end year.
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A man deposits P50,000 in a bank account at 6% compounded monthly for 5 years. If the inflation rate of 6.5% per year continues for this period, will this effectively protect the purchasing power of the original principal?
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Chapter 14 Solutions
ENGR.ECONOMIC ANALYSIS
Ch. 14 - Prob. 1QTCCh. 14 - Prob. 2QTCCh. 14 - Prob. 3QTCCh. 14 - Prob. 4QTCCh. 14 - Prob. 1PCh. 14 - Prob. 2PCh. 14 - Prob. 3PCh. 14 - Prob. 4PCh. 14 - Prob. 5PCh. 14 - Prob. 6P
Ch. 14 - Prob. 7PCh. 14 - Prob. 8PCh. 14 - Prob. 9PCh. 14 - Prob. 10PCh. 14 - Prob. 11PCh. 14 - Prob. 12PCh. 14 - Prob. 13PCh. 14 - Prob. 14PCh. 14 - Prob. 15PCh. 14 - Prob. 16PCh. 14 - Prob. 17PCh. 14 - Prob. 18PCh. 14 - Prob. 19PCh. 14 - Prob. 20PCh. 14 - Prob. 21PCh. 14 - Prob. 22PCh. 14 - Prob. 23PCh. 14 - Prob. 24PCh. 14 - Prob. 25PCh. 14 - Prob. 26PCh. 14 - Prob. 27PCh. 14 - Prob. 28PCh. 14 - Prob. 29PCh. 14 - Prob. 30PCh. 14 - Prob. 31PCh. 14 - Prob. 32PCh. 14 - Prob. 33PCh. 14 - Prob. 34PCh. 14 - Prob. 35PCh. 14 - Prob. 36PCh. 14 - Prob. 37PCh. 14 - Prob. 38PCh. 14 - Prob. 39PCh. 14 - Prob. 40PCh. 14 - Prob. 41PCh. 14 - Prob. 42PCh. 14 - Prob. 43PCh. 14 - Prob. 44PCh. 14 - Prob. 45PCh. 14 - Prob. 46PCh. 14 - Prob. 47PCh. 14 - Prob. 48PCh. 14 - Prob. 49PCh. 14 - Prob. 50PCh. 14 - Prob. 51PCh. 14 - Prob. 52PCh. 14 - Prob. 53PCh. 14 - Prob. 54PCh. 14 - Prob. 55PCh. 14 - Prob. 56PCh. 14 - Prob. 57PCh. 14 - Prob. 58PCh. 14 - Prob. 59PCh. 14 - Prob. 60PCh. 14 - Prob. 61PCh. 14 - Prob. 62PCh. 14 - Prob. 63PCh. 14 - Prob. 64PCh. 14 - Prob. 65PCh. 14 - Prob. 66PCh. 14 - Prob. 67PCh. 14 - Prob. 68PCh. 14 - Prob. 69PCh. 14 - Prob. 70PCh. 14 - Prob. 71PCh. 14 - Prob. 72PCh. 14 - Prob. 73PCh. 14 - Prob. 74PCh. 14 - Prob. 75PCh. 14 - Prob. 76PCh. 14 - Prob. 77PCh. 14 - Prob. 78PCh. 14 - Prob. 79PCh. 14 - Prob. 80PCh. 14 - Prob. 81PCh. 14 - Prob. 82PCh. 14 - Prob. 83PCh. 14 - Prob. 84PCh. 14 - Prob. 85P
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- QUESTION-2 Someone calculated the-future worth of his investment in term of today's dollars. The obtained result was $/945.89s, The life of the investment is expected to be 20 years. The average annual inflation rate along this period is 7%. If it is known that the investor earns 149% per year from this investment, what is the first cost of the investment?arrow_forwarda man deposit P50000 in a bank account at 6% compounded monthly for 5 years. If the inflation rate of 6.5% per year continues for this period , will this effectively protect the purchasing power of the original principal?arrow_forwardYour company borrows $800,000 and will pay it back at 10% APR of real interest compounded monthly. The payments will be adjusted to account for 4% annual inflation on top of the real interest required. You have arranged to make payments every 6 months for 5 years. What will your payments be? Use the Inflation adjusted method.arrow_forward
- You would like to buy a house that is currently on themarket at $85,000, but you cannot afford it right now. However, you think that youwould be able to buy it after 5 years. If the expected inflation rate as applied to the priceof this house is 7% per year, what is its expected price after four years?arrow_forwardToday a typical family of four spends $600/month for food. If inflation occurs at the rate of 5%/year over the next 6 yr, how much should the typical family of four expect to spend for food 6 yr from now?arrow_forwardA marketing company established a program to replace the cars of its sales representatives at the end of every 5 years. If the present price of the approved type of car is P520,000.00 with a resale value at the end of 5 years of 60% its present value, how much money must the company accumulate for 5 years if inflation annually is 10%. Release value will also appreciate at 10% yearly.arrow_forward
- John borrowed $7,000 from a commercial bank for 6 years to pay his tuition fee. Calculate the interest owed on this loan after 6 years in real dollars if the bank charges 7% annual (current) interest rate and annual inflation is 3%.arrow_forwardAn asset costs $10,000 today. If inflation is 4% per year and interest is 12% per year, what will be the appropriate future value of the machine adjusted for inflation in 8 years?arrow_forwarda certain commodity has a present value of 15000, find the future amount of the commodity after 3 years if the economic experiencing an inflation rate of 10% annuallyarrow_forward
- First month's shopping cart total is 565.54$ (base month) Second month's shopping cart total is 568.19$ Calculate the inflation rate SHOWING THE CALCULUS YOU MADE please write it clearly, preferably not on paperarrow_forwardHow much must you invest exactly 5 years from now to have $500,000 in today’s buying power 20 years from now? You can invest your money at 10% per year and inflation runs 4%.arrow_forwardSuppose you start saving for retirement when you are 45 years old. You invest $4,000 the first year and increase this amount by 4% each year to match inflation. How much money will you have saved after 20 years if the interest rate eamed on the retirement account is 9% per year? COLED (a) You will have saved $ (Round to the nearest dollar) (b) On the other hand, you will have saved $f the interest rate was 4% instead of the original 9%arrow_forward
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