Inflation causes things to cost more, and for our money to buy less. Suppose inflation decreases the value of money by 1.1% each year. How much will $ 200 buy you in 14 years? P…

Question

asked Jul 22, 2021 14.0k views

1 Answer

Nikhil Mohadikar · Answer 1 · 2021-07-27T23:33:33+0000

Answer: $171.31

Explanation:

A = P(1 - r)ⁿ

Given: P = 200, r = 1.1% (.011), n = 14

A = 200(1 - .011)¹⁴

= 200(.989)¹⁴

= 171.308

Since we are talking about money, round to two decimal places.