Can we calculate the percentage change between "PV" and "FV" and call it Nominal Income: Therefore, it would be: 13.04% And since Nominal Income = Real Income + i given: i = 4% Therefore, Real Income = 9.04% 23000 + (23000 * 9.04%) = 25079.2 Is this correct?
Doesn't it manipulate the raw data though? Say if im trying to compare 1960's income vs today, when today's income stat is manipulated with this value, can't it deceive the actual cost it would be to buy a house for example? Like instead of the house today costing 8 times my annual income, it only costs 6-7 times my annual income based on the already incorporated rate of inflation.
Can we calculate the percentage change between "PV" and "FV" and call it Nominal Income:
Therefore, it would be: 13.04%
And since Nominal Income = Real Income + i
given: i = 4%
Therefore, Real Income = 9.04%
23000 + (23000 * 9.04%) = 25079.2
Is this correct?
ty. saved me
Glad I could help!
Doesn't it manipulate the raw data though? Say if im trying to compare 1960's income vs today, when today's income stat is manipulated with this value, can't it deceive the actual cost it would be to buy a house for example? Like instead of the house today costing 8 times my annual income, it only costs 6-7 times my annual income based on the already incorporated rate of inflation.
How do we get to 1.04 from 0.04?
Dont get that part
You add 1 to the interest rate after converting it into decimal form.
Because you want the total number, 26,000 plus the four percent, .04.
24000/1.04=23076 ROFL
Nice mistake there D:
260000/1.04 ...