The price of a computer today is $400 and inflation is 5% per year.Therefore,in two years the price of the computer is expected to be $440.

Name: The price of a computer today is $400 and inflation is 5% per year.Therefore,in two years the price of the computer is expected to be $440.
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Question

Quizplus · Accepted Answer

With a 5% annual inflation rate, the price after one year would be $420 ($400 * 1.05), and after two years it would be $441 ($420 * 1.05), not $440.

The Price of a Computer Today Is $400 and Inflation