Inflation comparisons In 1974, Johnny Miller won 8 tournaments on the PGA tour and accumulated $353,...

 

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Inflation comparisons In 1974, Johnny Miller won 8 tournaments on the PGA tour and accumulated $353, 022 in official season earnings. In 1999, Tiger Woods accumulated $6, 616, 585 with a similar record. Suppose the monthly inflation rate from 1974 to 1999 was 0.0025 (3%/yr). Use the compound interest formula to estimate the equivalent value of Miller's winnings in the year 1999. Compare your answer with that from an inflation calculation on the web (e.g., bls.gov/cpi/home.htm). (b) Find the annual interest rate needed for Miller's winnings to be equivalent in value to Woods's winnings. What type of function did you use in part (a)? part (b)? Inflation comparisons In 1974, Johnny Miller won 8 tournaments on the PGA tour and accumulated $353, 022 in official season earnings. In 1999, Tiger Woods accumulated $6, 616, 585 with a similar record. Suppose the monthly inflation rate from 1974 to 1999 was 0.0025 (3%/yr). Use the compound interest formula to estimate the equivalent value of Miller's winnings in the year 1999. Compare your answer with that from an inflation calculation on the web (e.g., bls.gov/cpi/home.htm). (b) Find the annual interest rate needed for Miller's winnings to be equivalent in value to Woods's winnings. What type of function did you use in part (a)? part (b)?

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Solution using faumullain A P12 Given that Puincipal P 353022 ... View the full answer