Purchasing Power The purchasing power (real valueof money) decreases if inflation is present in theeconomy. For example, the purchasing power of$40,000 after t years of 5% inflation is given by themodelP = 40,000e-0.05tdollarsHow long will it take for the value of a $40,000 pension to have a purchasing power of $20,000 under5% inflation?

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Purchasing Power The purchasing power (real value
of money) decreases if inflation is present in the
economy. For example, the purchasing power of
$40,000 after t years of 5% inflation is given by the
model
P = 40,000e-0.05t
dollars
How long will it take for the value of a $40,000 pension to have a purchasing power of $20,000 under
5% inflation?

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