The links below will be helpful:
https://www.usinflationcalculator.com/ (Links to an external site.) (for consistency, let us use this link for homework calculations)
https://www.bls.gov/data/inflation_calculator.htm (Links to an external site.)
also: inflation page with links from class and other useful information
Finance 1.2: Inflation
1. A million dollar Apple computer
[6pts] On October 22, 2014, the website appleinsider reported that an antique Apple 1 computer “was sold at an auction on Wednesday, with the nearly 40-
year-old machine crushing expectations to fetch a record-breaking $905,000.” The 200 Apple 1’s sold for $666.66 each when they were introduced in 1976.
Compare the auction price to the appropriately inflated value of the original price.
Was the auction price a bargain? Compute profit as percentage of the original price, adjusted for inflation.
2. Taxes and Inflation
[12pts]The link https://files.taxfoundation.org/legacy/docs/fed_individual_rate_history_nominal.pdf (Links to an external site.) contains a complete history
of income tax brackets and rates from the inception of the income tax in 1913 through 2013. (it is quite interesting to nose about in this document and look
at historical data, taking note of patterns, trends, and corresponding historical events)
Compute the tax due in 2003 for a single taxpayer with a net taxable income of $30,000. What is her effective tax rate?
Suppose that the taxpayer received raises each year that kept up with inflation. Use an inflation calculator to calculate her net taxable income in 2013
Use the 2013 tax table to compute her tax in 2013. What is her effective tax rate?
Compare her 2003 tax and effective tax rate with her 2013 tax and effective tax rate, taking inflation into account. Has her tax gone up or down or stayed the