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
Round your answer to the nearest cent. The answer is not 85837.41!!!!!

Answer 1

$50,000

Explanation:

Formula to find interest :

I = Prt

Solving :

• I = (20,000)(0.06)(25)
• I = (1.5)(20,000)
• I = (30,000)

Future value :

• P + I
• 20,000 + 30,000
• $50,000