Question

Suppose that you invest $1,000,000 into a stock with an expected return of 8% per year. What is the expected number of years for the investment to grow to $4,000,000?

27 years

9 years

24 years

18 years

The following two tables represent the price and quantity of the goods produced within an economy in 2015 & 2016.

Calculate the price index for each good using 2015 as the base year. What is the value of the price index for Burgers in 2016?

	Prices		Quantities
	2015	2016	2015	2016
Soda	$2	$2	36	40
Burgers	$8	$12	8	10
French Fries	$2	$1	16	20

150

100

50

120

Answer 1

	2015		2016		market basket in 2015 Price in 2015 x Quantity in 2015	market basket in 2016 ( Price in 2016 x Quantity in 2015)
Item	Price $	Quantity	Price $	Quantity	$	$
Soda	2	36	2	40	72	72
Burgers	8	8	12	10	64	96
French fries	2	16	1	20	32	16
					168	184
CPI=( Cost of the base year market basket in the current period (2016)/Cost of the base year market basket in the base period (2015)x100
CPI for 2016	(184/168) 100		109.5
Price index for burger=(96/64)100= 150%