{"id":54,"date":"2012-09-25T22:15:13","date_gmt":"2012-09-26T05:15:13","guid":{"rendered":"https:\/\/blogs.ubc.ca\/fredericho\/?p=54"},"modified":"2012-11-19T05:22:55","modified_gmt":"2012-11-19T12:22:55","slug":"54","status":"publish","type":"post","link":"https:\/\/blogs.ubc.ca\/fredericho\/2012\/09\/25\/54\/","title":{"rendered":"Would you chose $1000 today or $1013 in a year?"},"content":{"rendered":"<p>In class today, we discussed the time value of money. Rob started off with an activity where all of us had to chose between $1000 today or $1200 paid in one year&#8217;s time. I was one of the few people who pointed at the $1200. I chose it because I remembered reading somewhere that inflation was at about 3% per year, meaning that I would have chosen any value above $1030 that was paid in a year.<\/p>\n<p>After doing a bit of research, it turns out I hadn&#8217;t remembered too incorrectly. <a href=\"http:\/\/www.tradingeconomics.com\/canada\/inflation-cpi\">The average inflation rate in Canada over the last 97 years was 3.2%<\/a>. The percentage is calculated after the end of each month and the current inflation rate as of August 2012 is 1.2%. Therefore, holding all other factors constant, shouldn&#8217;t the class have chosen any in-a-year offer over $1012?<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone\" title=\"Canadian Inflation Rate\" src=\"http:\/\/www.tradingeconomics.com\/charts\/canada-inflation-cpi.png?s=cacpiyoy\" alt=\"\" width=\"700\" height=\"300\" \/><\/p>\n<p>What interested me the most was that the inflation rate was broken down into individual inflation\/deflation rates of certain goods and services. For example, <a href=\"http:\/\/www.canoe.ca\/Canoe\/Money\/News\/2012\/09\/21\/20219236.html\">energy prices went up by 0.8%<\/a>\u00a0whereas <a href=\"http:\/\/www.investmentexecutive.com\/-\/inflation-dips-to-1-2-in-august\">natural gas prices fell by 13.8%<\/a>. From this data alone, am I allowed to assume that natural gas probably does not account for a majority of energy in Canada? I&#8217;m not sure, but it&#8217;s good food for thought!<\/p>\n<p>Picture Source: <a href=\"http:\/\/www.tradingeconomics.com\/charts\/canada-inflation-cpi.png?s=cacpiyoy\">Trading Economics<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In class today, we discussed the time value of money. Rob started off with an activity where all of us had to chose between $1000 today or $1200 paid in one year&#8217;s time. I was one of the few people &hellip; <a href=\"https:\/\/blogs.ubc.ca\/fredericho\/2012\/09\/25\/54\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":14944,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1214],"tags":[],"class_list":["post-54","post","type-post","status-publish","format-standard","hentry","category-finance"],"_links":{"self":[{"href":"https:\/\/blogs.ubc.ca\/fredericho\/wp-json\/wp\/v2\/posts\/54","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.ubc.ca\/fredericho\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.ubc.ca\/fredericho\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.ubc.ca\/fredericho\/wp-json\/wp\/v2\/users\/14944"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.ubc.ca\/fredericho\/wp-json\/wp\/v2\/comments?post=54"}],"version-history":[{"count":8,"href":"https:\/\/blogs.ubc.ca\/fredericho\/wp-json\/wp\/v2\/posts\/54\/revisions"}],"predecessor-version":[{"id":153,"href":"https:\/\/blogs.ubc.ca\/fredericho\/wp-json\/wp\/v2\/posts\/54\/revisions\/153"}],"wp:attachment":[{"href":"https:\/\/blogs.ubc.ca\/fredericho\/wp-json\/wp\/v2\/media?parent=54"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.ubc.ca\/fredericho\/wp-json\/wp\/v2\/categories?post=54"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.ubc.ca\/fredericho\/wp-json\/wp\/v2\/tags?post=54"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}