Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Struggling a lot on all these problems. Help on all would be greatly appreciated. 2,050 You may use formulas and your financial calculator to answer

Struggling a lot on all these problems. Help on all would be greatly appreciated.
image text in transcribed
2,050 You may use formulas and your financial calculator to answer each question. To receive full or partial credit, you must show your formulas and your work. Please make your answers are clear, organized, and legible. Label answers with correct units where applicable. You should round your final answer to two decimal places in most questions. PCE Deflator Year (2012-100) Interest Rates? (%) Land Values (S per acre) 2011 98.170 4.44 1,240 2012 100.000 4.27 1,510 2013 101.354 4.06 1,750 2014 102.887 3.79 2015 103.116 3.85 2,050 2016 104.148 4.07 1,910 2017 106.051 4.38 1,890 2018 108.318 4.89 1,850 2019 109.922 5.10 1,960 2020 111.225 3.71 1,900 2021 112.605 3.37 2,100 1. Using the data in the table above, calculate the following: a. (5 points) annual inflation rates for 2012-2021; b. (5 points) real interest rates for 2012-2021; and c. (5 points) land values in 2021 constant dollars (real land values) for 2011-2021. d. (5 points) Using an expected nominal growth rate of 3.0% and the 2013 land value per acre, predict the 2021 land value per acre. 2. (5 points) If the inflation rate is 3.0% and the nominal interest rate is 8.0%, what is the real interest rate? 3. (5 points) What is the real interest rate if the nominal interest rate is still 8.0% but inflation is 2%? a. Does it cost more or less to borrow than when inflation was at 3.0%? 4. (5 points) The retail price of a U.S. pork chop was $3.28/1b. in 2017. In 2018, the retail price of U.S. pork chop was $3.41/lb. If the inflation rate was 2.0%, what is the real percentage difference in the prices? a. Was the real price in 2018 higher or lower than it was in 2017? (Hint: find g, g) 5. (5 points) If land values increase at 4.5% for 10 years and the general rate of inflation is 3%, how much has the real value of land changed by the end of the 10th year

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

COMMENT INVESTIR ABC DE LA FINANCE

Authors: OLIVIER CHAZOULE

1st Edition

2020367521, 978-2020367523

More Books

Students also viewed these Finance questions