Question

Determining the inflation rate. In 2006, selected automobiles had an average cost of $16,000. The average...

Determining the inflation rate. In 2006, selected automobiles had an average cost of $16,000. The average cost of those same automobiles is now $28,000. What was the rate of increase for these automobiles between the two time periods?

Homework Answers

Answer #1

Inflation rate

It is the increase in the value of goods or service with a passage of time due to changing circumstances.

It can be calculated with the help of following formula:

Inflation rate/ increase rate = (T2 – T1 / T1)*100

Where T2 is the value of good in current period or next period and T1 is the value of good in previous period or current period respectively.

In present case,

T2 = $28,000

T1 = $16,000

Inflation rate = ($28,000 - $16,000 / $16,000) * 100

                         = ($12,000 / $16,000) * 100

                         = 75%

Inflation rate is calculated over the 12 years, annual rate may differ.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A delivery car had a first cost of $30,000, an annual operating cost of $16,000, and...
A delivery car had a first cost of $30,000, an annual operating cost of $16,000, and an estimated $7500 salvage value after its 6-year life. Due to an economic slowdown, the car will be retained for only 3 years and must be sold now as a used vehicle. At an interest rate of 9% per year, what must the market value of the used vehicle be in order for its AW value to be the same as the AW if...
A fleet manager wanted to determine the best replacement tires for their corporate automobiles. He selected...
A fleet manager wanted to determine the best replacement tires for their corporate automobiles. He selected six tire-types and had a set of each of them installed randomly on 23 selected automobiles. He then recorded the mileage when the tires came due for replacement. Use the Excel output below to analyze the data. Are there differences in life-time mileages of tires, at the five percent significance level? ANOVA Source of Variation SS df MS F P-value F crit Between Groups...
Between 2005 and 2009​, the average rate of inflation was about 3.6​% per year. If a...
Between 2005 and 2009​, the average rate of inflation was about 3.6​% per year. If a cart of groceries cost ​$180 in​ 2005, what did it cost in 2009​? A cart of groceries cost approximately ​$ IN 2009.
The real risk-free rate, r*, is 2%. Inflation is expected to average 1.65% a year for...
The real risk-free rate, r*, is 2%. Inflation is expected to average 1.65% a year for the next 4 years, after which time inflation is expected to average 5.4% a year. Assume that there is no maturity risk premium. An 8-year corporate bond has a yield of 11.5%, which includes a liquidity premium of 0.7%. What is its default risk premium? Do not round intermediate calculations. Round your answer to two decimal places.
A company decides to offer an average annual raise of 8%, although the current inflation rate...
A company decides to offer an average annual raise of 8%, although the current inflation rate is 10%. Each engineering manager decides on the best way to distribute the salary increase to his/her staff. However, if everyone gets an increase of 8%, then there will be no differentiation between strong and weak performers for the previous year. What should you do as an engineering manager? Book Title Engineering Management Author C. M. Chang ISBN 978-1-4987-3007-5
Chapter 30 Money Growth and Inflation 1. Over the past 70 years, prices in the U.S....
Chapter 30 Money Growth and Inflation 1. Over the past 70 years, prices in the U.S. have risen on average about a. 2 percent per year. b. 4 percent per year. c. 6 percent per year. d. 8 percent per year. 2. Over the past 70 years, the overall price level in the U.S. has experienced a(n) a. 4-fold increase. b. 8-fold increase. c. 12-fold increase. d. 16-fold increase. 4. Inflation can be measured by the a. change in the...
Question: 5 The relationship between the quantity of real balances demanded and the rate of interest...
Question: 5 The relationship between the quantity of real balances demanded and the rate of interest (called the demand for money curve) will ____ when GDP increases because _____. * A) increase (shift right); more transactions balances are needed to make purchases and to hold between pay periods B) increase (shift right); more asset balances are needed for saving or precautionary reasons C) decrease (shift left); fewer transactions balances are needed to make purchases and to hold between pay periods...
9. Average cost in the long-run is defined as _____. TVC/Q TC/Q TVC + TFC/Q none...
9. Average cost in the long-run is defined as _____. TVC/Q TC/Q TVC + TFC/Q none of the above 10. Economies of scale is a characteristic of production where ______. average costs increase as output increases total cost decreases as output increases average cost decreases as output increases average cost decreases as output decreases 11. Which of the following factors of production is more likely to be fixed in the short run? The number of workers. Changes in electricity consumed....
2. Suppose there are two countries that are otherwise the same (e.g. in regards to inflation...
2. Suppose there are two countries that are otherwise the same (e.g. in regards to inflation and risk etc.) except that Country L2 is a lending country and Country B2 is a borrowing country. (a) For Country L2, which will happen in foreign exchange markets, an increase in demand for the country’s currency or an increase in supply of the country’s currency? (b) What happens to the strength of Country L2’s currency? (c) What happens to the trade balance for...
Problem a (PA5a.java) Write a program that deals with inflation, which is essentially the rising cost...
Problem a (PA5a.java) Write a program that deals with inflation, which is essentially the rising cost of general goods over time. That is, the price of goods, such as a packet of peanuts, goes up as time goes by. So, you will write a program to gauge the expected cost of an item in a specified number of years. The program asks for the cost of the item, the number of years, and the rate of inflation. The output is...