If inflation averages 6 percent per year, what is the loss of purchasing power for a dollar ten years from now?
A) 74 cents
B) 47 cents
C) 44 cents
D) 31 cents

Question

Quizplus · Accepted Answer

The purchasing power of a dollar decreases by the inflation rate each year. After 10 years at 6% inflation, the purchasing power is approximately 44 cents, calculated using the formula: (1 - 0.06)^10.

If Inflation Averages 6 Percent Per Year, What Is the Loss