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If another Austin Powers movie had been released in 2014 2014​, and Dr.​ Evil, now armed with a financial​ calculator, wanted to hold the Earth ransom for ​$ 9,905,971.09 9,905,971.09​, what inflation rate would Dr. Evil use to make his ransom equivalent to ​$1.0 million in​ 1967?

Respuesta :

Answer:

inflation rate 5%

Explanation:

given data

principal = $9,905,971.09

mature amount = $1000000

time = 47 year  ( 2014 - 1967 )

to find out

inflation rate

solution

we apply here future value formula that is

FV = principal × [tex](1+rate)^{time}[/tex]    ..................................1

put here value we get rate

$1000000  = $9,905,971.09  × [tex](1+rate)^{47}[/tex]

solve it we get rate

rate = 5%

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