Chapter 22, Problem 37P

Rosalie the Retiree knows that when she retires in $\text{16}$ years, her company will give her a one-time payment of $\$\text{2}0,000$.

However, if the inflation rate is $\text{6}\%$ per year, how much buying power will that $\$\text{2}0,000$ have when measured in today’s dollars? Hint: Start by calculating the rise in the price level over the $\text{16}$ years.