Final answer:
To calculate the value of money in 2025 compared to 2009 and 2014, we can use the formula Value in a specific year = Nominal value * (1 + Inflation rate)^Number of years.
Step-by-step explanation:
To calculate the value of money in 2025 compared to 2009 and 2014, we need to take into account the inflation rate. The formula for calculating the value of money in a specific year is:
Value in a specific year = Nominal value * (1 + Inflation rate)Number of years
Using this formula, we can calculate:
Value in 2025 = $100 * (1 + 0.025)11
Value in 2009 = $100 * (1 + 0.025)-5
Value in 2014 = $100 * (1 + 0.025)0
Thus, $100 in 2014 would be worth about $75.99 in 2025. We can't directly calculate the value of money in 2025 compared to 2009 because we only have the nominal value from 2014. However, if we had the nominal value from 2009, we would follow a similar approach and adjust the 'Number of Years' in the formula accordingly.
Inflation erodes the purchasing power of money over time, and understanding its impact is crucial for financial planning. It is important to note that while more money might seem better, the real value of money is what matters after accounting for inflation.