Several problems related to price of inflation

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Reference no: EM131307825

Inflation is a general increase in prices and may be measured by the Consumer Price index (CPI). The following are several problems related to price of inflation?

a. In 1984 the CPI was 100; 30 years later, it was 235. What was the annual rate of inflation?

b. Nancy and Pam both currently earn $100,000. If the annual rate of inflation is 4 percent, how much must each earn after ten years to maintain their purchasing power?

c. Your parents bought a home for $50,000 in 1982 and sold it in 2012 for $250,000. What was the annual rate of price increase over the 30 years?

Reference no: EM131307825

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