Business Mathematics 13th Edition by Gary Clendenen,Stanley Salzman

Exercise 2

Li is amazed that he will be able to accumulate over $600,000. However, he knows that inflation will increase his cost of living significantly in 30 years. He assumes 3% inflation and wants to find the income he needs at age 67 to have the same purchasing power as $40,000 today. ( Hint: Look at inflation in Section and use the compound interest table in Section.) ____________