If the CPI Was 160 in 2008 and 40 in 2005

question 150

Multiple Choice

If the CPI was 160 in 2008 and 40 in 2005, the cost of living was:

• A)4 times higher in 2008 than in 2005.
• B)25 percent higher in 2008 than in 2005.
• C)constant over the period.
• D)4 times lower in 2008 than in 2005

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Definitions:

Consol

A type of perpetuity.

Future Values

The value of an asset or amount of money at a specified date in the future that is equivalent in value to a specified sum today.

Present Values

The process of determining the present worth of an amount or series of cash flows that will be received or paid in the future, using a specific discount rate.

Annuity Payment

A fixed sum of money paid to someone each period, typically for the rest of their life or for a fixed number of years.