1. You think that you need $60,000/year to live on when you retire. Assuming an annual inflation of 3.4%, how much would you need in actual dollars per year 40 years from now to have the same purchasing capability? answer_________
2. You expect your cost for steel to increase 3% next year, then 5% the year after that, and finally 6% three years out. Compute the average inflation rate for your steel purchases over the next 3 years._____________