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- SA inflation eases slightly in JanuaryInflation eased to 5.7% in January, down from 5.9% the month prior — which was a hair’s breadth away from theceiling of the South African Reserve Bank’s target range of 3% to 6%, it was announced on Wednesday.According to Statistics South Africa, the main contributors to the 5.7% annual inflation rate were food and nonalcoholic beverages, housing and utilities, transport and miscellaneous goods and services.The 5.9% annual increase in December was the highest since March 2017, when the rate was 6.1%. The Januaryslowdown in inflation was helped by lower fuel prices.South Africa’s inflation numbers come as advanced economies post record figures, which have served as furtherproof that elevated prices are a stubborn feature of the recovery from the Covid-induced economic slump…Elevated inflation, which central banks have said will be transitory, is the result of Covid-related supply bottlenecks 1.16 From the above extract, the South African economy…Problem ##1Suppose you borrow $ 20,000 at 9% compounded monthly, for 5 years. Knowing that 9% represents the market interest rate, the monthly payment in current dollars will be $ 415.17. If the average monthly headline inflation rate is expected to be 0.5%, what will be the annual equivalent of equal monthly payments in constant dollars?Set the value for periods N in months and the effective interest per month.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%.
- 5. Funding the nest egg shortfall Determining Retirement Shortfall Yuan and Alex have 40 years to retirement. They are taking a personal finance course and have calculated their projected retirement income and investment needs. Based on their calculations and taking into account their Social Security and pension incomes, they have a projected shortfall of $6,750.00 per year. Use the following tables to answer the questions about future value interest factors. Interest Factors-Future Value Interest Factors-Future Value of an Annuity Periods 3.00% 5.00% 6.00% 8.00% 9.00% 5.600 1.810 2.090 3.386 4.290 2.653 3.210 4.661 6.848 8.620 2.420 4.322 5.740 10.062 13.260 20.410 2.810 5.516 7.690 14.785 20 25 30 35 40 3.260 7.040 10 280 21 724 31 410 = The impact of the inflation factor Continuing their worksheet, they consult a friend, economics professor Dr. Wu, who believes that they can expect the average annual inflation rate to be 5%, possibly 6% tops. Complete the following table by…A capital asset has first cost of $10,000 and it depreciates at 10% rate annually. Operating costs over next four years are given below Year Operating costs, $/year 1. 1,200 2 2,200 3 3,800 2,200 Operating costs are expressed in actual dollars. Calculate EAC (Operating) if real interest rate is 10% and annual inflation is 2%. (Note: Don't use the $ sign in your answer and round it to 2 decimal places)Question 7 15.0% 14.0% 13.0% 12.0% 11.0% .10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Inflation Rate (n) down to 0 decreases to 5.04 1,000 2,000 10.04 3,000 4,000 5,000 Consider the graph above. It is also in the files folder under the name Short Run and the Long Run. The graph pertains to a hypothetical country. The central bank in this country (also called the Fed) follows an inflation targeting policy. The current target inflation rate in 8 percent (I know, it is too high. We will deal with this problem later after appointing a new chairperson for the Fed). The natural rate of unemployment is 5 percent and Okun's alpha is 8. 7000.00 LRAS Suppose that consumer confidence in the economy declines and as a result AD decreases by 3,000 units. This reduction in demand causes the inflation rate to slow 7.00 percent in the short run. In the short run, the real GDP percent. AD Real GDP (Y) SRAS 6,000 7,000 8,000 9,000 10,000 3 11,000 12,000 13,000 14,000 15,000 16.000 17,000…
- SA inflation eases slightly in January Inflation eased to 5.7% in January, down from 5.9% the month prior — which was a hair’s breadth away from the ceiling of the South African Reserve Bank’s target range of 3% to 6%, it was announced on Wednesday. According to Statistics South Africa, the main contributors to the 5.7% annual inflation rate were food and non-alcoholic beverages, housing and utilities, transport and miscellaneous goods and services. The 5.9% annual increase in December was the highest since March 2017, when the rate was 6.1%. The January slowdown in inflation was helped by lower fuel prices. South Africa’s inflation numbers come as advanced economies post record figures, which have served as further proof that elevated prices are a stubborn feature of the recovery from the Covid-induced economic slump… Elevated inflation, which central banks have said will be transitory, is the result of Covid-related supply bottlenecks. Which of the following presents the view of…Why do the selling prices of depreciable assets increase with the general inflation rate?Explanation it correctly
- In the market the real interest rate is 3% and nominal interest rate is 6.6% Find inflation rate.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.