Answer:
Decrease in purchasing power =$(96.67)
Explanation:
To determine the alteration in purchasing power, we assess the value of the IRA after three years relative to its worth considering prices from three years ago.
The value of $5,500 after three years equals 5,500 × 1.012^3 = 5700.385
The purchasing power of $5,700.38 based on past prices for three years earlier
=5700.385504 × 1/(1.018^3)
= $5403.32
Change in purchasing power = $5403.32 - $5,500= $(96.67)
Decrease in purchasing power =$(96.67)
Response:
The type of buying situation is: Modified rebuy
Clarification:
A modified rebuy occurs when an individual or company reorders a product or service previously purchased but now seeks to change the supplier, product details (for example, gel seats) or the sales terms.
