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Interest and inflation are similar.
If it is compounded annually, then you multiply the value by 1.04 each year.
So...
If you start with $100.
At the end of the first year you have $104.
At the end of the second year, you have $104*1.04 = $108.16
At the end of the third year, you have $108.16*1.04 = $112.49
At the end of the fourth year, you have $112.49*1.04 = $116.99
At the end of the fifth year, you have $116.99*1.04 = $121.67
That means, after 5 years, on average, an item that had cost $100 the first year would now cost $121.67.
In general this is just averages, and nothing goes up at exactly the same rate.
If you had saved the $100 in a non interest bearing cash, or your wages had not increased over time, then your original $100 now has "buying power" equivalent to $100*(100/$121.67) = $82.19.
What else can I help you with?
How do you write 4 5th into a percent?
% rate = 4/5 * 100% = 80%
How do you turn 0.04 to a percent?
% rate= 0.04 * 100%= 4%
What is 4 out of 30 as a percent?
% rate:= 4/30 * 100%= 0.1333 * 100%= 13.33%
What is the rate of VAT if an article marked at rupees 5000 is sold for rupees 5200?
The VAT rate is 4 percent.
What percent is 4 of 1000000?
% rate:= (4/1000000) x 100%= 0.000004 x 100%= 0.0004%
What is the US national Inflation rate in 2010?
4 percent
What would you expect the nominal rate of interest to be if the real is 4 percent and the expected inflation rate is 7 percent?
5
What is the percent of compound inflation on a long term care policy?
The percent of compound inflation of a long term care insurance policy depends on the choice of the policyholder, you may either choose 3%, 4% or 5% compound inflation rate. A compound inflation rate adds more money to your benefits compared to a simple inflation rate.
How much will 180000 dollars be in 20 years with 9 percent interest and 4 percent inflation rate?
477,567
Julia invested 3000 at an annual interest rate of 5 percent. From last year to this year there has been a 4 percent inflation rate. After a year the purchasing power of her investment?
rose by 1 percent
Julia invested 3000 at an annual interest rate of 5 percent. From last year to this year there has been a 4 percent inflation rate. After a year the purchasing power of her investment .?
rose by 1 percent
Julia invested 3000 at an annual interest rate of 5 percent from last year to this year there has been a 4 percent inflation rate after a year the purchasing power of her investment?
rose by 1 percent
House price is 250000 with 4 percent inflation rate how much will the house cost in five years?
If price of House is Rs. 2,50,000.00 Inflation 4% annually. After 5 years, Price of house will be: Future value = Present value (1+ inflation rate) ^ years i.e., 2,50,000.00 * (1+0.04)^5 = Rs. 3,04,163.23
The real risk-free rate of interest is 4 percent Inflation is expected to be 2 percent this year and 4 percent during the next 2 years Assume that the maturity risk premium is zero What is the yield?
The answers are 7%, 7.33%.
What is ideal inflation rate in India?
When compare to developed nations, Indian ideal inflation rate should be around 3-4%
From 1960 until 2012, the long-run average rate of inflation in the United States was?
about 4% From 1960 until 2012, the long-run average rate of inflation in the United States was: about 4%.
When you are earning interest is it better to have high or low rates?
High rates.However, high interest rates are usually a consequence of high inflation rates and so what matters is not the interest rate but the real interest rate which is the nominal interest rate relative to the inflation rate.Thus a 3% interest rate when inflation is 1% is better that a 5% interest rate when inflation is 4%.
