How much purchasing power do you have

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Reference no: EM131849739

Problem

Instead of spending the $50/month you receive you decided to invest it in your money market account that your bank offers Assuming you will earn an average of 5% each year and inflation is forcasted to 2.5% a year how much have you effectively earned after 10 years? in other words, after you have factored out the effects of inflation, how much purchasing power do you have?

Reference no: EM131849739

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