Question

Annual Inflation Rate

Year 2 Percent 4 Percent 6 Percent 8 Percent 10 Percent
2019 $1,000 $1,000 $1,000 $1,000 $1,000
2020 980 962 943 926 909
2021 961 925 890 857 826
2022 942 889 840 794 751
2023 924 855 792 735 683
2024 906 822 747 681 621
2025 888 790 705 630 564
2026 871 760 665 584 513
2027 853 731 627 540 467
2028 837 703 592 500 424
2029 820 676 558 463 386

Using the table, what will the real value of $100 be in 10 years if you hide the money under your mattress and the inflation rate is
Assume you hid the money under your mattress in 2019.
0% =

Answer 1

The real value of $100 in 10 years at a 0% annual inflation rate remains $100, as there would be no change in the purchasing power of the money.

Step-by-step explanation:

The question asks for the real value of $100 in 10 years at a 0% annual inflation rate if the money is kept under a mattress from the year 2019. When the inflation rate is 0%, it means that there is no change in the purchasing power of money over time. Thus, the real value of money remains the same. At a 0% inflation rate, there is no decrease or increase in the value of the currency due to inflation or deflation. Therefore, if you hide $100 under your mattress, after 10 years, the real value of that $100 would still be $100, assuming no other factors come into play, such as wear and tear or loss of the currency itself.

The real value of money refers to its purchasing power in terms of goods and services, accounting for inflation or deflation. It reflects the actual quantity of goods and services that a unit of currency can buy, providing a more accurate measure of an individual's or a nation's economic well-being.