Question: eBook Problem 7-09 Inflation is a general increase in prices and may be measured by the Consumer Price Index (CPI). Use Appendix A to answer

eBook Problem 7-09

Inflation is a general increase in prices and may be measured by the Consumer Price Index (CPI). Use Appendix A to answer the questions.

In Year 1 the CPI was 100; 30 years later, it was 241. What was the annual rate of inflation? Round your answer to the nearest whole number. %

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

Your parents bought a home for $50,000 in Year 1 and sold it in Year 26 for $220,000. What was the annual rate of price increase over the 25 years? Round your answer to the nearest whole number.

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