Question: Learning materials and I don't understand Task 1 (3.5 points). On 1 January 2007, Albert invested 1,000 at 6 per cent interest per year for

Learning materials and I don't understand

Learning materials and I don't understand Task 1 (3.5 points). On 1

Task 1 (3.5 points). On 1 January 2007, Albert invested 1,000 at 6 per cent interest per year for three years. The CPI on 1 January 2007, stood at 100. On 1 January 2008, the CPI stood at 100. On 1 January 2009, it was 110 and on 1 January 2010, the day Albert's investment matured, the CPI was 118. Find the real rate of interest earned by Albert in each of the three years and his total real retum over the three-year period. Assume that interest earnings are reinvested each year and earn interest. Task 2 (4 points). In the base year for computing the CPI, expenditures of the typical consumer break down as follows: Item Food and beverages Housing Trans-partition Medical care Other goods, services Suppose that, since the base year, the prices of food and beverages have increased by 10 per cent, the price of housing has increased by 5 per cent, and the price of medical care has increased by 10 per cent. Other prices are unchanged. Find the CPI for the current year

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