Homework Answers
We are given the following equation
Pn/Po = (1 + x)^n where x is the inflation rate
1) 241.4 = 120(1 + x)^5
1 + x = (241.4/120)^0.2
x = 15.00%
Per year inflation rate on average is 15.0%.
2) 248.6 = 120(1 + x)^6
1 + x = (248.6/120)^0.167
x = 12.93%
Per year inflation rate on average is 12.9%.
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