Homework Answers
Real Value = Nominal Value *CPI of previous year / CPI of current year
Part a
CPI of current year = 100 + (100 *10/100) = 110%
= 10000 * 100/ 110
= $9091
Part b
CPI previous year = 100%
CPI current year = 100 - (100 * 2/100 ) = 98%
Real Value = 10000 * 100/98
= $10204
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