Question

assuming that she dies in 9 years and the average inflation has been 4 percent, what is the value of the purchasing power of the proceeds?

Answer 1

Purchasing power of proceeds = Death benefit / FVIF3%, 10

= $200,000 / 1.344 = $148,809.52

What is average inflation ?

U.S. Labor Department data released on December 13 show that the annual inflation rate for the United States was 7.1% for the 12 months ending in November 2022 after gaining 7.7% before. On January 12, 2023, at 8:30 a.m. ET, the following inflation update is expected to be released. It will provide the inflation rate for the calendar year that concluded in December 2022.Annual US inflation rates for the calendar years 2000 and 2012 to 2022 are shown in the chart and table below. (See historical inflation rates for earlier years.) Use the US Inflation Calculator to determine the accumulated rates between two different dates.

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