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Year PCE Deflator1 (2013=100) Interest Rates2 (%) Land Values3 ...

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Finance

Year PCE Deflator $1$

$(2013 = 100)$ Interest Rates $2$

$(%)$ Land Values $3$

$($ $ per acre $)$

$2013 100.0 4.06 1, 750$

$2014 104.3 3.79 2, 050$

$2015 108.0 3.85 2, 050$

$2016 111.8 4.07 1, 910$

$2017 116.7 4.38 1, 890$

$2018 122.4 4.89 1, 850$

$2019 126.6 5.10 1, 960$

$2020 124.7 3.71 1, 820$

$2021 140.9 3.24 1, 970$

$2022 153.8 4.52 2, 420$

$2023 163.1 7.85 2, 750$

$2024 165.3 8.25 2, 970$

$1 .$ Using the data in the table above, calculate the following:

a $. (6$ points $)$ annual inflation rates for $2014 - 2024$ ;

b $. (6$ points $)$ real interest rates for $2014 - 2024$ ; and

c $. (6$ points $)$ land values in $2024$ constant terms $($ real land values $)$ for $2013 - 2024 .$

d $. (3$ points $)$ Using both an expected nominal growth rate of $4.0 %$ and the $2014$ land

value per acre in the table above, predict the $2024$ land value per acre.

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