Question

If the present value of an item is P

and we experience an inflation rate
of r for t years, what will the future
value of the item be?
P = $20,000
r= 6%
t= 25

Answer 1

89633.78

Explanation:

Pe^r(t)

20.000e^.06(25)

Answer 2

$85,837.41

Explanation:

The future value will be ...

P(1 +r)^t

$20,000(1 +.06)^25 ≈ $85,837.41