Padayappa has now retired after 40 years of employment. He just made an annual deposit to his investment portfolio and realized he has $2,400,000 (not counting home, cars, furniture, etc.). His money has been earning 7 percent per year, and inflation has been running 4 percent per year over the past 40 years. What equal amount of money did he put Into his Investment at the end of each year? $[ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is + -5. What is the buying power of his $2,400,000 in terms of a base 40 years ago? $[ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is + -50. If he could buy a TV 40 years ago for $500, what would a comparable one cost today if the consumer electronics inflation rate is -3 percent? Carry all interim calculations to S decimal places and then round your final answer to the nearest dollar. The tolerance Is + -1.

a. $12,022

b. $499,896

c. $148

Explanation:

a. What equal amount of money did he put Into his Investment at the end of each year?

Let the equal amount be represented by a.

Therefore, $2,400,000 = FV(7%,40,xa

Based on the information given in the question, we'll then use excel function,

a = PMT(7%, 40, 2400000)

= 12,022

Therefore, the equal amount of money did he put Into his Investment at the end of each year is $12022.

b. What is the buying power of his $2,400,000 in terms of a base 40 years ago?

Let the buying power be represented by x.

Based on the information given in the question,

x × (100% + 4%)^40 = 2,400,000

x × (1.04)^40 = 2400000

x × 4.8010 = 2400000

4.8010x = 2400000

x = 2400000/4.8010

x = 499,895.86

x = 499,896

Therefore, the buying power is $499,896.

c. If he could buy a TV 40 years ago for $500, what would a comparable one cost today if the consumer electronics inflation rate is -3 percent?

The price of TV today will be:

= $500 × (1 - 3%)^40

= $500 × (1 - 0.03)^40

= $500 × 0.97^40

= $500 × 0.29571

= $148

Therefore, the price of the tv will be $148

two years ago, when picking flowers in the mountains back of yosemite valley, i found a book. it was blotted and storm-beaten; all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however; many of the inner pages were well preserved. and although all were more or less stained and torn, whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today; its granite pages have been torn and blurred by the same storms that wasted the castaway book.

two years ago, when picking flowers in the mountains back of yosemite valley; i found a book. it was blotted and storm-beaten, all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however, many of the inner pages were well preserved. and although all were more or less stained and torn; whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today, its granite pages have been torn and blurred by the same storms that wasted the castaway book.