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The price of one item is $ 600 in year 4 and the general price inflation rate was expected to be 5%per year. What is its esti
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Answer #1

rate positively .. let me know if you need any clarification..

Price in year 2 = Price in year 4/(1+inflation rate)^2
Therefore price in year 2 = 600/(1+5%)^2
    544.22
Ans =           544
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