Suppose you have $200,000 in a bank term account. You earn 5% interest per annum from this account. You anticipate that the inflation rate will be 4% during the year. However, the actual inflation rate for the year is 6%. Calculate the impact of inflation on the bank term deposit.

Automobile insurance policies (contracts) typically are issued every 6 months. Consider an actual case during the tail part of 2018 where a policy was worth approximately $649. In March of 2019 the issued policy is projected to be approximately $700. Note that these costs are somewhat high. What is the rate of inflation in these policies over this time period? 2.  Los Angeles, CA and Atlanta, GA (ATL baby!!!) are two of the most well-known cities in the U.S. These cities are also very large (with LA being the larger of the two). Given that the number of people in the labor force was 6,827,958 (LA) and 3,097,603 (ATL), and the number of people out of work for Atlanta was 110, 713 and for LA was 285,764, what was the rates of unemployment for these two cities for December 2018?   3.  Here are some data for numbers of people in the labor force for some cities in the U.S.: Columbia, SC (400,750); Jacksonville, FL (775,809); Charlotte, NC (1,343,634), and Charleston, SC (379,429). What…

In order to make up for the future loss in purchasing power. the rate at which you earn interest must be sufficiently higher than the anticipated inflation rate. True or false?

Interest RatesSuppose that you make a loan of $1,500 to your friend at a rate of 10% interest because you expect the inflation rate to be 5%.a) By how much does your purchasing power increase once the loan is completely paid off?b) Assuming that after the loan was repaid, you discovered that inflation rate over the life of the loan was only 2%. Who gained?

The nominal interest rate is 10​%. The inflation rate is 2​%.   The real interest rate is equal to

Mary will earn $42,544 this year and $21,839 next year. The real interest rate is 15% between this year and next year; she can borrow or lend at this rate. She has no wealth at the start of this year and plans to finish next year having consumed everything she possibly can. She would like to consume the same amount this year as next year. The inflation rate is 0%. How much should Mary save?

If the nominal interest rate on a loan was 10 percent and the real interest rate was 8 percent, then the inflation rate during that time must have been: 9% 2% 1.25% 18%

am. 110.

Use the information in the table to calculate the %change in prices (inflation rate), using a chain-weighted methodology. Q1=2 Q2=3 Year (t) P1 E1 P2 E2 E(t) 2017 $1.05 $2.00 2018 $1.10 $2.10 2019 $1.10 $2.15 2020 $1.15 $2.15 Price Index Inflation Rate 2017 2018 2019 2020 Question 1: What is the inflation rate for 2019? a) 1.76% b) 1.16% c) -0.60% d) -3.02

Assume you have won a lottery prize of $5,000, which works out great since you want to buy a new gaming PC that costs $5,500. You decide to save the lottery winnings for one year by purchasing a bank CD with one year until maturity. The interest rate on your deposit is 12% and inflation is expected to be 8% over the next year. You plan to work part-time to make up any shortfall in your savings covering the cost of the gaming PC one year from now. a.  How much money will you have in your bank account at the end of one year? b. What is the real interest rate you expect to earn on your deposit over the next year?  c. Will you have enough money from the savings to buy the PC next year? d. If your answer to c. is no, how many hours of work @ $15/hour will be required to make up the shortfall?