Whats the purchasing power of kates deposit after one year

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Suspose kate is an avid reader and buys only comic books. Kate deposits 2000 in a bank that pays an annual interest rate of 20%. At the time of her deposit a comic book cost $10.00.

Intially, the purchasing power of kates $2,000 deposit is ______ comic book.

a. 50
b.3000
c. 200
d.220
e. 150

The price of a comic book rises at the rate of inflation. For each of the annual inflation rates whats the purchasing power of kates deposit after one year.

annual inflation rates 0%, 20%, 25%

Reference no: EM13237490

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