Posted by **Anonymous** on Thursday, October 15, 2009 at 6:34pm.

The Inflation Problem. If a person makes $30,000 in 2004 and the inflation rate is 4% annually, how much is this salary worth in the year 2008 (in terms of 2004 dollars)?

Would I just add by 4% for 4 years?

- Math -
**Reiny**, Thursday, October 15, 2009 at 7:13pm
No, his salary would be worth LESS than $30,000 in the year 2008

value = 30000(1 - .04)4 = $25,480.40

- Math -
**Anonymous**, Thursday, October 15, 2009 at 7:27pm
I would not have figured that out. Thank you

- Math -
**Reiny**, Thursday, October 15, 2009 at 7:35pm
just noticed a typo

my last line should have been

value = 30000(1 - .04)^4 = $25,480.40

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