Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose you have $300,000 cash today and you can invest it to become worth $3,000,000 in 14 years. What is the present purchasing power equivalent

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

Suppose you have $300,000 cash today and you can invest it to become worth $3,000,000 in 14 years. What is the present purchasing power equivalent of this $3,000,000 when the average inflation rate over the first six years is 5% per year, and over the last eight years it will be 9% per year? Click the icon to view the interest and annuity table for discrete compounding when = 5% per year Click the icon to view the interest and annuity table for discrete compounding when = 9% per year. The present purchasing power equivalent is thousand. (Round to two decimal places.) More Info an 9% - X tabl tabl thous N 1 2 3 4 5 6 7 8 9 10 11 12 Discrete Compounding; ; -5% Single Payment Uniform Series Compound Compound Sinking Amount Present Amount Present Fund Factor Worth Factor Factor Worth Factor Factor To Find F To Find P To Find To Find P To Find A Given P Given F Given A Given A Given F/P FA PIA A/F 1.0500 0.9524 1.0000 0.9524 1.0000 1.1025 0.9070 20500 1.8594 0.4878 1.1576 0.8638 3.1525 2.7232 0.3172 1.2155 0.8227 4.3101 3.5460 0.2320 1.2763 0.7835 5.5256 4.3295 0.1810 1.3401 0.7462 6.8019 5.0757 0 1470 1.4071 0.7107 8.1420 5.7864 0.1228 1.4775 0.6768 9.5491 6.4632 0.1047 1.5513 0.6446 11 0266 7.1078 0.0907 1.6289 0 6139 12.5779 7.7217 0.0795 1.7103 0.5847 14.2068 8.3064 0.0704 1.7959 0.5568 15 9171 8.8633 0.0628 nh 437470 OLAR Capital Recovery Factor To Find A Given P AP 1.0500 0.5378 0.3672 0.2820 0.2310 0.1970 0.1728 0.1547 0.1407 0.1295 0.1204 0.1128 AROC Print Done 6 of 6 (0 complete) - X More Info the av u can be 9% nity tabi nity tab thous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 1.0500 1 1025 1.1576 1.2155 1.2763 1 3401 1.4071 1.4775 1.5513 1.6289 1.7103 1.7959 1.8856 1.9799 2.0789 2.1829 2.2920 24066 2.5270 2.6533 0.9524 0.9070 0.8638 0.8227 0.7835 0.7462 0.7107 0.6768 0.6446 0.6139 0 5847 0.5568 05303 0.5051 0.4810 0.4581 0.4363 0.4155 0.3957 0.3769 1.0000 2.0500 3.1525 43101 5.5256 6.8019 8.1420 9.5491 11.0266 12.5779 14 2068 15.9171 17.7130 19 5986 21.5786 23.6575 25.8404 28.1324 30.5390 33.0660 0.9524 1.8594 2.7232 3.5460 43295 5.0757 5.7864 6.4632 7. 1078 7.7217 8.3064 8.8633 9.3936 9.8986 10.3797 10.8378 112741 11.6896 12 0853 12.4622 1.0000 0.4878 0.3172 0.2320 0.1810 0.1470 0.1228 0.1047 0.0907 0.0795 0.0704 0.0628 0.0565 0.0510 0.0463 0.0423 0.0387 0.0355 0.0327 0.0302 1.0500 0.5378 0.3672 0.2820 0.2310 0.1970 0.1728 0.1547 0.1407 0.1295 0.1204 0 1128 0.1065 0.1010 0.0963 0.0923 0.0887 0.0855 0.0827 0.0802 Print Done 1 More Info - 51 US N 1 2 3 4 5 6 Discrete Compounding; i =9% Single Payment Uniform Series Compound Compound Capital Amount Present Amount Present Sinking Fund Recovery Factor Worth Factor Factor Worth Factor Factor Factor To Find To Find P To Find To Find P To Find A To Find A Given P Given F Given A Given A Given Given P F/P P/F FIA P/A AF A/P 1.0900 0.9174 1.0000 0.9174 1.0000 1.0900 1.1881 0.8417 2.0900 1.7591 0.4785 0.5685 1.2950 0.7722 3.2781 2.5313 0.3051 0.3951 1.4116 0.7084 4.5731 3.2397 0.2187 0.3087 1.5386 0.6499 5.9847 3.8897 0.1671 0.2571 1.6771 0.5963 7.5233 4.4859 0.1329 0.2229 1.8280 0.5470 9.2004 5.0330 0.1087 0.1987 1.9926 0.5019 11.0285 5.5348 0.0907 0.1807 2.1719 0.4604 13.0210 5.9952 0.0768 0.1668 2.3674 0 4224 15.1929 6.4177 0.0658 0.1558 2.5804 0.3875 17.5603 6.8052 0.0569 0.1469 2.8127 0.3555 20.1407 7.1607 0.0497 0.1397 2 ORE 77024 7 ARRO 122 7 8 9 10 11 12 13 Print Done More Info > 1 2 3 4 5 6 7 8 9 10 11 1.0900 1.1881 1.2950 1.4116 1.5386 1.6771 1.8280 1.9926 2.1719 2.3674 2.5804 2.8127 3.0658 3.3417 3.6425 3.9703 4.3276 47171 5.1417 5.6044 0.9174 0.8417 0.7722 0.7084 0.6499 0.5963 0.5470 0.5019 0.4604 0.4224 0.3875 0.3555 0.3262 0.2992 0.2745 0.2519 0.2311 02120 0.1945 0.1784 1.0000 2.0900 3.2781 4.5731 5.9847 7.5233 9.2004 11.0285 13.0210 15.1929 17.5603 20.1407 22.9534 26.0192 29.3609 33.0034 36.9737 41.3013 46.0185 51 1601 0.9174 1.7591 2.5313 3.2397 3.8897 4.4859 5.0330 5.5348 5.9952 6.4177 6.8052 7.1607 7.4869 7.7862 8.0607 8.3126 8.5436 8.7556 8.9501 9.1285 1.0000 0.4785 0.3051 0.2187 0.1671 0.1329 0.1087 0.0907 0.0768 0.0658 0.0569 0.0497 0.0436 0.0384 0 0341 0.0303 0.0270 0.0242 0.0217 0.0195 1 0900 0.5685 0.3951 0.3087 0.2571 0.2229 0.1987 0.1807 0.1668 0.1558 0.1469 0.1397 0.1336 0.1284 0.1241 0.1203 0.1170 0.1142 0.1117 0.1095 12 13 14 15 16 17 18 19 20 Print Done

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

Step: 3

blur-text-image

Ace Your Homework with AI

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

Get Started

Students also viewed these Accounting questions