QuestionIndex the initial \$52000 investment for an average inflation of 3% per year over the investment period.

Studdy Solution

STEP 1

Assumptions1. The initial investment amount is \$52,000. The average inflation rate per year is3%
3. The inflation is calculated annually, not monthly compounding4. The investment period is not specified, so we will assume it to be one year for this example

STEP 2

First, we need to find the inflation amount on the initial investment. We can do this by multiplying the initial investment by the inflation rate.
$Inflation\, amount = Initial\, investment \\times Inflation\, rate$

STEP 3

Now, plug in the given values for the initial investment and inflation rate to calculate the inflation amount.
$Inflation\, amount = \$52,000 \\times3\%$

STEP 4

Convert the percentage to a decimal value.
$3\% =0.03$ $Inflation\, amount = \$52,000 \\times0.03$

STEP 5

Calculate the inflation amount.
$Inflation\, amount = \$52,000 \\times0.03 = \$1,560$

STEP 6

Now that we have the inflation amount, we can find the total amount of the initial investment indexed for inflation. This includes both the initial investment and the inflation amount.
$Total\, indexed\, amount = Initial\, investment + Inflation\, amount$

STEP 7

Plug in the values for the initial investment and the inflation amount to calculate the total indexed amount.
$Total\, indexed\, amount = \$52,000 + \$1,560$

STEP 8

Calculate the total indexed amount.
$Total\, indexed\, amount = \$52,000 + \$1,560 = \$53,560$ The initial investment of \$52,000 indexed for inflation is \$53,560.

Was this helpful?

Get Studdy

Scan QR code with your device to get Studdy on iOS or Android

QR code

Studdy solves anything!

Download the app

Start learning now

Download Studdy AI Tutor now. Learn with ease and get all help you need to be successful at school.

Parents Influencer program Contact Policy Terms