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 = $300,000 r = 7% t = 30
4
Round your answer to the nearest cent.

Answer 1

The future value of the item, after experiencing an inflation rate for a certain number of years, can be calculated using the formula Future Value = Present Value * (1 + Inflation Rate)^Years. Applying this formula with the given values of P = 300,000, r = 7%, and t = 30, the future value is 2,125,894.41.

Step-by-step explanation:

To calculate the future value of an item after experiencing an inflation rate for a certain number of years, we can use the formula: Future Value = Present Value * (1 + Inflation Rate)Years. Given that the present value (P) is 300,000, the inflation rate (r) is 7%, and the number of years (t) is 30, we can substitute these values into the formula to calculate the future value.

Future Value = 300,000 * (1 + 7%)30 = 2,125,894.41

Therefore, the future value of the item, rounded to the nearest cent, would be 2,125,894.41.