Posted by **sha** on Thursday, March 3, 2011 at 1:40am.

the purchasing power (in dollars) of an annual amount of A dollars after t years of 5% inflation decays according to

P= Ae^-0.05t

a) how long will it be before a pension of $60,000 per year has a purchasing power of $30,000

b) how much pension A would be needed so that the purchasing power P is $50,000 aftter 15 years?

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