Exhibit 13-1 Consumer Price Index

question 100

Multiple Choice

Exhibit 13-1 Consumer Price Index

-As shown in Exhibit 13-1,the rate of inflation for Year 2 is:

• A) 5 percent.
• B) 10 percent.
• C) 20 percent.
• D) 25 percent.

---

Definitions:

Periodic Interest Rate

The interest rate charged or earned over a particular period of time, less than a year, on a loan or investment.

Nominal Annual Rate

Nominal Annual Rate is the annual rate of interest without taking into account the compounding of interest within a year or the effects of inflation.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return.

Future Value

The estimated value of an investment at a specific future date, taking into account factors such as interest rates and compounding.