Chapter 4.2, Problem 13E

Reminder Round all answers to two decimal places unless otherwise indicated.

Inflation The yearly inflation rate tells the percentage by which prices increase. For example, from $1990$ through $2000$, the inflation rate in the United States remained stable at amount $3\%$ per year. In $1990$, an individual retired on a fixed income of $\$36,000$ per year. Assuming that the inflation rate remains at $3\%$, determine how long it will take for the retirement income to deflate to half its $1990$ value. (Note: To say that retirement income has deflated to half its $1990$ value means that prices have doubled.)