Assume that the current CPI is 157. In 25 years, the CPI is expected to be 231. If the nominal rate of return is expected to be 7% per year over the next 25 years, then what must be the expected real return per year?
When your uncle first started working 20 years ago, his salary was $18,000 per year. He currently makes $94,000 per year. If inflation was 3% annually over the past 20 years, how would you describe his purchasing power, on average?