Question

How long would it take for the price level to double if inflation persisted at the following percentages? Instructions: Enter your answers as whole numbers. a. 8.75 percent per year: years. b. 1.25 percent per year: years. c. 1.75 percent per year: years.

Answer 1

a.

use financial calculator as

PV=-1 assumed as current value

FV=2 as the double value in future

I/Y=8.75 is the rate of interest

PMT=0

Click CPT

Click N=8 years is answer..

b.

use financial calculator as

PV=-1 assumed as current value

FV=2 as the double value in future

I/Y=1.25 is the rate of interest

PMT=0

Click CPT

Click N=56 years is answer..

c.

use financial calculator as

PV=-1 assumed as current value

FV=2 as the double value in future

I/Y=1.75 is the rate of interest

PMT=0

Click CPT

Click N=40 years is answer..

the above is answer..