Question

Let y=20,000(0.95)^x represent the buying power of $20,000 with an inflation rate of 5% per year. What is the buying power when x=0?
A. 20,000
B. $19,000
C. $40,000
D. $0

Answer 1

$20,000

Note that any base to the power zero is always one. \[(.95)^{0}=1\]

So you have $20,000 times 1 = $20,000