Vinay J. answered 05/19/19
NYU MBA Tutor for Finance, Economics, Stats, FRM, GRE, GMAT and Math
100/(1.03)^20 = 55.37
Alexus M.
asked 05/19/19Inflation causes things to cost more, and for our money to buy less (hence your grandparents saying "In my day, you could buy a cup of coffee for a nickel"). Suppose inflation decreases the value of money by 3% each year. In other words, if you have $1 this year, next year it will only buy you $0.97 worth of stuff. How much will $100 buy you in 20 years?
Vinay J. answered 05/19/19
NYU MBA Tutor for Finance, Economics, Stats, FRM, GRE, GMAT and Math
100/(1.03)^20 = 55.37
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