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Problem:

The average cost of a certain model car was $18,000 ten years ago. This year the average cost is $30,000.

Required:

Question 1: Calculate the average monthly inflation rate fm for this model

Question 2: Given the monthly rate fm, what is the effective annual rate, f, of inflation for this model?

Question 3: Estimate what these will sell for 10 years from now expressed in today's dollars

Note: Explain the solution in detail.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91174808

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