Name : Shams Mashar Assignment - 05
Id : fa18-beee-0040
Question No : 01 The CPI of a country from 2016 to 2020 is as follows,
2016- 122.5, 2017—129.32, 2018—137.56,2019—143.52, 2020-149.32
Calculate average inflation rate from 2016 to 2020?
Answer: As we know that ,
f = ( F / P )1/n - 1
Data:
Where,
F = Final CPI = 149.32
P = Present CPI = 122.5
n = number of periods = 4 years
f= Average rate of inflation = ?
Solution:
Putting the values of ‘F’ , ‘P’ and ‘n’ into the above formula we get
the value of f,
f = ( 149.32 / 122.5 )¼ - 1
f = ( 1.21893)¼ - 1
f = 1.0507 - 1
f = 0.0507 * 100 = 5.07% Answer
Q-2 A company is estimating following cash flows for next five years
Year Cash Flows
2020 Rs 75,000.00
2021 Rs 95,000.00
