Suppose,when you retire 40 years from now,you will want to live on what is $5,000 per month at today's prices.How much will this be 40 years from now if the average annual rate of inflation is the same as that between 1965 and 2010? In 1965 the CPI was 29.9,and in 2010 the CPI was 201.6.

Question

Quizplus · Accepted Answer

The Answer is The average annual rate of inflation between 1965 and 2010 was:

Using this average annual rate,$5,000 40 years from now will equal $5,000

imes

(1.0433)⁴⁰ = $27,248 per month.
Alternatively,this can be calculated as The average annual rate of inflation between 1965 and 2010 was: Using this average annual rate,$5,000 40 years from now will equal $5,000 imes (1.0433)<sup>40</sup> = $27,248 per month. Alternatively,this can be calculated as .

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Suppose,when You Retire 40 Years from Now,you Will Want to Live