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24 June, 10:22

You have $44000 in a savings account that pays 2% annual interestand the inflatation rate is 3.24%. How much buying power in dollars will you lose in one year because of inflation?

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  1. 24 June, 10:28
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    At the end of the year ...

    the price will be 44,000*1.0324 = 45,425.60

    the bank balance will be 44,000*1.02 = 44,880.00

    This is 545.60 fewer dollars than required to pay the price.

    You lose $545.60 in current-year buying power.
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