Question

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?


PLEASE HELP!!!

Answer 1

Answer: $171.31

Step-by-step 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.