Suppose that your salary is $35,000 in year one, will increase 6% per year through year...

Suppose that your salary is $35,000 in year one, will increase 6% per year through year 4, and is expressed in actual dollars as follows:

EOY	Salary$
1	35,000
2	37,100
3	39,326
4	41,685

If the general price inflation is expected to average 8% per year for the first two years and 7% per year for the last two years.

A. What is the real dollar equvalent of these actual dollar salary amounts? Assume that base period is year one.

B. If your personal MARR is 10% per year, calculate the real interest rate?

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jeff jeffy answered 2 years ago

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