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describe how to find the price of a blender 3 years from now the inflation is constant at 4% and the the blender costs 38$ today

1 Answer

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FV = PV / (1 +r)^n

Where FV = Future Value, PV = Present Value, r = inflation rate in %,
n = number of years.

PV = $38, r = 4%, n = 3 years.

FV = 38 / (1 + 4%)^3

= 38 / (1 + 0.04)^3

= 38 / (1.04)^3 = 33.782

Hence the value 3 years from now = $33.78
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