2. 3. Marks: 1 mark per question If a Starbucks Frappuccino costs S5 in 20X2 (the base year), $5.25 in 20X3, and $5.50 in 20X4, use the consumer price index to compute the inflation rate from 20X3 to 20X4. (1) 105% (2) 100% (3) 650% (4) 4.76% George Farmer earns S4,OOO from his farm operation in 1947. In 2018, George's grandson Karl earns $75,000 from the same farm. The price index for 1947 is I O, and the price index for 2018 is 134. What is George's income equivalent to in 2018? (1) $6,500 (2) S53,600 (3) $60,000 (4) S72,500 Michelle deposits $20,000 into a saving account on the first day Of the year. The saving account pays 4% interest. There is inflation during the year. Which Of the following is a correct statement about MichelWs savings at the end of the year? (I) Michelle Will earn $800 interest by the end Of the year. (2) When Michelle withdraws her principal at the end ofthe year, she will have $20,800. (3) Michelle Will be richer by $800 in real terms. (4) All of the above are correct statements.