Suppose Dalia is a sports fan and buys only football tickets. Dalia deposits $3,000 into a savings account that pays an annual nominal interest rate of %. Assume this interest rate is fixed, and so it will not change over time. On the day she makes her deposit, suppose that a football ticket has a rice of $15.00. nitially, Dalia's $3,000 deposit has a purchasing power of football tickets. for each of the annual inflation rates given in the following table, first determine the new price of a football ticket, assuming it rises at the rate of nflation. Then enter the corresponding purchasing power of Dalia's deposit after one year in the first row of the table for each inflation rate. Finally, nter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest football ticket. For example, if you find that the deposit will cover 20.7 football tickets, ou would round the purchasing power down to 20 football tickets under the assumption that Dalia will not buy seven-tenths of a football ticket.
Suppose Dalia is a sports fan and buys only football tickets. Dalia deposits $3,000 into a savings account that pays an annual nominal interest rate of %. Assume this interest rate is fixed, and so it will not change over time. On the day she makes her deposit, suppose that a football ticket has a rice of $15.00. nitially, Dalia's $3,000 deposit has a purchasing power of football tickets. for each of the annual inflation rates given in the following table, first determine the new price of a football ticket, assuming it rises at the rate of nflation. Then enter the corresponding purchasing power of Dalia's deposit after one year in the first row of the table for each inflation rate. Finally, nter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest football ticket. For example, if you find that the deposit will cover 20.7 football tickets, ou would round the purchasing power down to 20 football tickets under the assumption that Dalia will not buy seven-tenths of a football ticket.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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