Homework Answers
| Amount lent | $210 | ||||
| Nominal interest rate | 3% | ||||
| Future value after one year | $216.30 | (210*(1+0.03) | |||
| Inflation Rate | 2% | ||||
| Equivalent amount of $210 after inflation | $214.20 | (210*(1+0.02) | |||
| Amount of increase in purchasing power | $2.10 | (216.30-214.20) | |||
| Percentage increase in purchasing power | 0.98% | (2.10/214.20)*100 | |||
| The Purchasing Power | Increased by | 0.98% | |||
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