Examlex

Solved

Mary Graduated from a College in 2004 and She Wanted

question 24

Multiple Choice

Mary graduated from a college in 2004 and she wanted to go on a sea cruise the same year. However, she could not afford it at that time because of the high price of $2 550. Today she can afford it, however, the cruise price is $2 870 now. If the price of the cruise in real dollars has not changed and the inflation rate has been 3.0% since 2004, what year is it now?


Definitions:

Interest Rate

The percentage at which interest is paid by a borrower for the use of money that they borrow from a lender or the rate earned on a deposit or investment.

Present Value

The present value of a future amount of money or series of cash flow using a given rate of return.

Interest Rate

The fee, quantified as a percentage relative to the principal, levied by a lender on a borrower to utilize assets.

Rule of 70

A formula used to estimate the number of years required for an investment or the economy's output to double, calculated by dividing 70 by the annual growth rate.

Related Questions