home economics
posted by ryan .
Suppose you’ll have an annual nominal income of $40,000 for each of the next 3 years, and the inflation rate is 4 percent per year. Find the real value of your $40,000 salary for each of the next 3 years.

future value: 40,000 (1/(1.04)^n
You can use google calculator for this.
put this in the google search window, for year 3
40000/(1.04)^3 
can you explain why you use that formula?
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