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What is the percentage increase in Tyra purchasing power

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Question - Tyra loves to shop at Dollar? Barrel, where she can find many items priced at exactly? $1. Tyra has ?$200 to spend and is thinking of going on a shopping spree at Dollar? Barrel, but she is also thinking of investing her money.? (Ignore all sales and income? taxes.)

Suppose the expected rate of inflation is 1?% ?(so next? year, everything at Dollar Barrel will cost ?$1.01?) and Tyra can earn 5?% on investments. Approximately what real rate of interest could Tyra earn if she invests her? money? How many items can she buy at Dollar Barrel? today, and how many can she buy a year from now if she invests today and goes shopping? later? What is the percentage increase in? Tyra's purchasing power if she waits a year to? shop? Compare your answer to the approximate real rate of interest on? Tyra's investment.

Reference no: EM132965001

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