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?

Answer 1

What do you get if you substitute 0 for x?

Answer 2

20,000

Answer 3

That's what I got too. They are just asking you to substitute x=0 and tell the value of y (the buying power of $20.000).

Answer 4

I didn't know if that was right because they added the part about "with an inflation rate of 5% per year."

Answer 5

So it's 20,000?

Answer 6

Yup, it's $20,000.

You don't need the inflation rate because they are asking for x=0.
It makes sense, if you think about it. If you're spending the $20,000 right now (at x=0) it doesn't matter what the inflation is going to be.