# Math

posted by .

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 -

No, his salary would be worth LESS than \$30,000 in the year 2008

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

• Math -

I would not have figured that out. Thank you

• Math -

just noticed a typo

my last line should have been

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

• Math -

if a movie ticket cost \$8 for admission, what would the cost be in 7 years, assuming an inflation rate of 3%?

## Similar Questions

1. ### Stats (Finance)

Given the following information: Year X Y Z 2004 12.53 2.64 -4.65 2005 6.25 4.67 16.78 2006 -9.62 -3.50 13.46 2007 -12.99 -6.89 10.43 2008 26.84 13.56 -3.56 A. Calculate the average rate of return for each of X, Y, Z for the period …
2. ### math

If a person makes \$30,000 in 2004 and the inflation rate is4% annually, how much is this salary worth in the year 2008 (in terms of 2004 dollars)?
3. ### Finance

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)?
4. ### Finance

2004 and the inflation rate is 4% annually
5. ### MTH 156

I am having trouble with this question, please help. 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)?
6. ### math

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)?
7. ### Finance

(Inflation) A projectâ€™s initial investment is \$40,000, and it has a five-year life. At the end of the fifth year, the equipment is expected to be sold for \$12,000, at which time its net book value will be \$5,000. The CFATs (including …
8. ### math

3. (TCO A) The following questions are worth 5 points each. Please show all work. a. Inflation is expected to average five percent for the long term and Mr. Smith earned \$74,000 this year, how much must he earn in 20 years just to …
9. ### math

the formula S=c(1+r)^2 models inflation, where C= the value today, r=the annual inflation rate, and S= the inflated value t years from now use this formula to solve the problems: If the inflation rate is 6% how much will a house now …
10. ### Math

Omar's current annual salary is \$75,000. How much will he need to earn 15 years from now to retain his present purchasing power if the rate of inflation over that period is 2%/year?

More Similar Questions