Problem 1: Assume that you want to retire 30 years from now with an amount of money that will have the same value (same buying power) as $1.5 million today. If you estimate the inflation rate will be 4% per year, how many then-current dollars will you need?

Problem 2: If the inflation rate is 7% per year, how many years will it take for the cost of something to double, if the price increases only by the inflation rate?

Problem 3: An engineer who is now 65 years old began planning for retirement 40 years ago. At that time, he thought that if he had $1 million when he retired, he would have more than enough money to live his remaining life in luxury. If the inflation rate over the 40-year time period averaged a constant 4% per year, what is the constant-value dollar amount of his $1 million?

Problem 4: A piece of heavy equipment can be purchased for $85,000 now or for an estimated $130,000 five years from now. At a real interest rate of 10% per year and an inflation rate of 6% per year, determine if the company should buy now or later with inflation considered.

Problem 5: How much can the manufacturer of superconducting magnetic energy storage systems afford to spend now on new equipment in lieu of spending $75,000 four years from now? The companys real MARR is 12% per year and the inflation rate is 3% per year.

Problem 6: A corporation plans to set aside $60,000 per year beginning 1 year from now for replacing equipment 5 years from now. What will be the buying power of the amount accumulated (with respect to todays dollars) if the investment grows by 10% per year, but inflation averages 4% per year?

Problem 7: If the inflation rate is 6% per year and a person wants to earn a true (real) interest rate of 10% per year, determine the number of then-current dollars he has to receive 10 years from now if the present investment is $10,000.

Problem 8: A Toyota Tundra can be purchased today for $32,350. A civil engineering firm is going to need 3 more trucks in 2 years because of a land development contract it just won. If the price of the truck increases exactly in accordance with an estimated inflation rate of 3.5% per year, determine how much the 3 trucks will cost in 2 years.