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1. The average person now has assets totalling S3 8 000. If the average real wealth per person remains the same, and if inflation averages 5% in the future, when will the average person become a millionaire?

2. How much is the present worth of S10 000 ten years from now under each of the following patterns of inflation, if interest is at 5%? On the basis of your answers, is it generally reasonable to use an average inflation rate in economic calculations?
(a) Inflation is 4%.

(b) Inflation is 0% for five years, and then 8% for five years.

(c) Inflation is 8% for five years, and then 0% for five years.

(d) Inflation is 6% for five years and then 2% for five years.

(e) Inflation is 0% for nine years and then 40% for one year.

Business Management, Management Studies

  • Category:- Business Management
  • Reference No.:- M92184553

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