--%>

Rate of inflation

If the price index was 110 last year and is 121 this year, Calculate  this year’s rate of inflation? Determine the “rule of 70”? How long would it take for the price level to double if inflation persisted at (a) 2, (b) 5, and (c) 10 % per year?

E

Expert

Verified

This year’s rate of inflation is 10% or [(121 – 110)/110] ´ 100.

Dividing 70 by the annual percentage rate of rise of any variable (for example, the rate of inflation or population growth) will give the approximate number of years for doubling of the variable.

   Related Questions in Finance Basics

  • Q : Reducing payroll costs It is likely

    It is likely that in the next few years, employers will face incresing pressures to reduce their payroll costs. critically evaluate the range of ways by which payroll costs can be reduced whilst taking into account the need to maintain a focus on the

  • Q : Make mutual and stockholder-owned

    Compare and make mutual and stockholder-owned savings and associations of loan. Some savings and loan associations are owned through stockholders, just as commercial banks and other corporations are owned through their stockholders.  Other

  • Q : Describe benefits of collecting early

    Describe benefits of "collecting early" and how do companies effort to do this? Money contains time value. The sooner cash is gathered, the better. Companies employ regional collection centres and lock boxes to facilitate this.

  • Q : Define Senate Senate : The higher house

    Senate: The higher house of California’s Legislature comprising of 40 members. As an outcome of Proposition 140 (that is, 1990, term limits) and Proposition 28 (that is, 2012, limits on Legislators’ terms in office), members chosen in or a

  • Q : What do you mean by the term Year of

    Year of Appropriation (YOA): It refers to the initial year of an appropriation.

  • Q : What is Reference Code Reference Code :

    Reference Code: A three-digit code recognizing whether the item is from the Budget Act or some other source (example, legislation), and its character (example, state operations). This is the middle segment of the budget item or appropriation number.

  • Q : Explain Modified Accrual Basis Modified

    Modified Accrual Basis: The base of accounting in which revenues are acknowledged when the underlying transaction has occurred as of the last day of the fiscal year and the quantity is measurable and accessible to finance expenditures

  • Q : Explain Financial Reporting Financial

    Financial Reporting: It is a set of documents made generally by government agencies at the end of accounting period. It usually enclose summary of accounting data for that time period, with background forms, notes, and other information.

  • Q : Advantages of finger prints biometric

    Advantages of finger prints biometric technique: Easy to use and very little training is used No space is required for the installation Large amounts of existing data to allow background list check Has proven effect

  • Q : Describe matching principle of working

    Describe matching principle of working capital financing? Explain the benefits of following this principle? The matching principle is while short-term financing is utilized for temporary current assets while long-term financing is utilized for