The cost of the 12 days of Christmas has steadily been increasing. The table below shows...

 

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The cost of the 12 days of Christmas has steadily been increasing. The table below shows the cost of the 12 days of 1992 and in 2017 (from the PNC Christmas Price Index). Gift One partridge in a pear tree Two turtle doves Three French hens Four calling birds Five gold rings Six geese-a-laying Seven swans-a-swimming Eight maids-a-milking Nine ladies dancing Ten lords a leaping Eleven pipers piping Twelve drummers drumming Total cost 1992 27.50 104.00 15.00 280.00 300.00 150.00 13,120.86 34.00 2606.83 2924.88 1053.00 1140.75 $21,756.82 2017 219.95 375.00 181.50 599.96 825.00 369.00 13.125.00 58.00 7552.84 5618.90 2708.40 2934.10 $34,567.65 a) Determine the inflation rate of the total cost of the 12 days of Christmas over this period. b) If this inflation continues, determine the total price of the 12 days of Christmas in 2027. Give your answer in both real (2017 dollars) and actual dollars. Note: the market interest rate is currently running at 5%. The cost of the 12 days of Christmas has steadily been increasing. The table below shows the cost of the 12 days of 1992 and in 2017 (from the PNC Christmas Price Index). Gift One partridge in a pear tree Two turtle doves Three French hens Four calling birds Five gold rings Six geese-a-laying Seven swans-a-swimming Eight maids-a-milking Nine ladies dancing Ten lords a leaping Eleven pipers piping Twelve drummers drumming Total cost 1992 27.50 104.00 15.00 280.00 300.00 150.00 13,120.86 34.00 2606.83 2924.88 1053.00 1140.75 $21,756.82 2017 219.95 375.00 181.50 599.96 825.00 369.00 13.125.00 58.00 7552.84 5618.90 2708.40 2934.10 $34,567.65 a) Determine the inflation rate of the total cost of the 12 days of Christmas over this period. b) If this inflation continues, determine the total price of the 12 days of Christmas in 2027. Give your answer in both real (2017 dollars) and actual dollars. Note: the market interest rate is currently running at 5%.

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Use the inflation rate formula Subtract the past date CPI from the ... View the full answer