PV = present value

i = Inflation

n = number of years

Inflation is rise in the average price level of goods and services or a decrease in the purchasing power of the standard unit of currency.

Currently, we have a total of 10,000 Euros in the safe. I assume an inflation rate of 2% per year. What will be the value of my 10,000 Euros after 5 years?

So, substituting into the formula above:

BH = 10,000 / (1 + 0.02)^5

BH = 9,057 Euros will be the value of your 10,000 Euros after 5 years.

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