Answer Happy

5. Interest, Inflation, and purchasing power Suppose Rosa is a cinephile and buys only movie tickets. Rosa deposits $3,000 in a bank account that pays an annual nominal interest rate of 10% Assume this interest rate is fixed-that is, it won't change over time. At the time of her deposit, a movie ticket is priced at $15.00. Initially, the purchasing power of Rosa's $3,000 deposit is movie tickets. For each of the annual inflation rates given in the following table, first determine the new price of a movie ticket, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Rosa's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflati 100 Hint: Round your answers in the first row down to the nearest mo 220 you would round the purchasing power down to 20 movie tickets u 270 Number of Tickets Rosa Can Purchase after One Year Real Interest Rate 388 t. For example, if you find that the deposit will cover 20.7 movie tickets, assumption that Rosa will not buy seven-tenths of a movie ticket. nual Inflation Rate 10% 13% When the rate of inflation is equal to the interest rate on Rosa's deposit, the purchasing power of her deposit of the year. over the course

5. Interest, Inflation, and purchasing power Suppose Rosa is a cinephile and buys only movie tickets. Rosa deposits $3,000 in a bank account that pays an annual nominal interest rate of 10%. Assume this interest rate is fixed-that is, it won't change over time. At the time of her deposit, a movie ticket is priced at $15.00. Initially, the purchasing power of Rosa's $3,000 deposit is movie tickets. For each of the annual inflation rates given in the following table, first determine the new price of a movie ticket, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Rosa's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. 100 Hint: Round your answers in the first row down to the nearest movie ticket. For 200 you would round the purchasing power down to 20 movie tickets under the assum Number of Tickets Rosa Can Purchase after One Year Real Interest Rate 0% Annual 270 388 if you find that the deposit will cover 20.7 movie tickets, at Rosa will not buy seven-tenths of a movie ticket. Rate 13% % When the rate of inflation is equal to the interest rate on Rosa's deposit, the purchasing power of ber deposit, of the year. over the course

5. Interest, Inflation, and purchasing power Suppose Rosa is a cinephile and buys only movie tickets. Rosa deposits $3,000 in a bank account that pays an annual nominal interest rate of 10%. Assume this interest rate is fixed-that is, it won't change over time. At the time of her deposit, a movie ticket is priced at $15.00. Initially, the purchasing power of Rosa's $3,000 deposit is movie tickets. For each of the annual inflation rates given in the following table, first determine the new price of a movie ticket, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Rosa's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. 100 Hint: Round your answers in the first row down to the nearest movie ticket. For example, if you 194 at the deposit will cover 20.7 movie tickets, you would round the purchasing power down to 20 movie tickets under the assumption that Ros t buy seven-tenths of a movie ticket. 270 Number of Tickets Rosa Can Purchase after One Year Real Interest Rate 0% Annual Inflation Rate 10% 388 % When the rate of inflation is equal to the interest rate on Rosa's deposit, the purchasing power of her deposit of the year. over the course

5. Interest, inflation, and purchasing power Suppose Rosa is a cinephile and buys only movie tickets. Rosa deposits $3,000 in a bank account that pays an annual nominal interest rate of 10%. Assume this interest rate is fixed-that is, it won't change over time. At the time of her deposit, a movie ticket is priced at $15.00. Initially, the purchasing power of Rosa's $3,000 deposit is movie tickets. For each of the annual inflation rates given in the following table, first determine the new price of a movie ticket, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Rosa's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest movie ticket. For example, if you find that the deposit will cover 20.7 movie tickets, you would round the purchasing power down to 20 movie tickets under the assumption that Rosa will not buy seven-tenths of a movie ticket. Number of Tickets Rosa Can Purchase after One Year Real Interest Rate 0% Annual Inflation Rate 10% 13% When the rate of inflation is equal to the interest rate on Rosa's deposit, the purchasing power of her deposit of the year. falls remains the same rises over the course