Engineering Board Exam Reviewer · Inflation and Real Interest Rates · easy
An item costs P100,000 today. If inflation is 6% per year, how much will an equivalent item cost in 5 years?
- P130,000
- P74,725.82
- P133,822.56
- P530,000
Answer
C. P133,822.56
Solution
F=P(1+f)n=100,000(1.06)5=P133,822.56.
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