Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 8, Problem 25P
To determine

Calculate the present value.

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"You invest $75 immediately for 9 years. The inflation rate is 5.1%. At the end of 9 years, you receive $230.78 in actual (year-9) dollars. What is the inflation-free internal rate of return? Enter your answer as a percentage rounded to the nearest tenth of a percent."
A man desires to have P3M money in his savings when he retires after 25 years. This has amount in the present purchasing power. If the expected average inflation rate is 7% per year and the savings earns 5.5%, what lump sum of money should he invest now?
If inflation averages 2.5% each year from 2015 to 2025, what is the purchasing power in 2015 dollars of $75,000 in 2025
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