# Finance

posted by .

if the price of milk has quadrupled (that is, grown four times) over the past 25 years, what has been the annual rate of inflation in milk price over that time period?

• Finance -

(1+i)^25 = 4
take the 25th root of both sides
1+i = 4^(1/25)
1+i = 1.0570188
i = .057 or 5.7%

check: suppose milk cost \$0.50 25 years ago
now it would cost
.5(1.0570188)^25
= 2.0
which is four times what it was 25 years ago

## Similar Questions

1. ### Microeconomics

The invention of a machine that increases milk production is discovered. If farmers were to decry the effect of this new technology on the price of milk and lobby government to set the price of milk at the price before the invention, …
2. ### Microeconomics

The invention of a machine that increases milk production is discovered. If farmers were to decry the effect of this new technology on the price of milk and lobby government to set the price of milk at the price before the invention, …
3. ### Finance

if the price of milk has quadrupled (that is, grown four times) over the past 25 years, what has been the annual rate of inflation in milk price over that time period?
4. ### Fin

if the price of milk has quadrupled (that is, grown four times) over the past 25 years, what has been the annual rate of inflation in milk price over that time period?
5. ### finance

A treasury note with a maturity of four years carries a nominal rate of interest of 10%. In contrast, an eight year treasury bond has a yeild of 8%. A. If inflation is expected to average 7% over the first four years,what is the expected …
6. ### finance

12. A Treasury note with a maturity of four years carries a nominal rate of interest of 10 percent. In contrast, an eight-year Treasury bond has a yield of 8 percent. a. If inflation is expected to average 7 percent over the first …
7. ### finance

12. A Treasury note with a maturity of four years carries a nominal rate of interest of 10 percent. In contrast, an eight-year Treasury bond has a yield of 8 percent. a. If inflation is expected to average 7 percent over the first …
8. ### Finance

A Treasury note with a maturity of four years carries a nominal rate of interest of 10 percent. In contrast, an eight-year Treasury bond has a yield of 8 percent. A. If inflation is expected to average 7 percent over the first four …
9. ### math

Milk was purchased for \$48.00. Due to the price increases, this was 2.3 times the cost of milk two years ago. What was the cost of milk two years ago?
10. ### finance

New York Times Co. (NYT) recently earned a profit of \$1.31 per share and has a P/E ratio of 19.25. The dividend has been growing at a 6.50 percent rate over the past six years. If this growth rate continues, what would be the stock …

More Similar Questions