Suppose your bank pays you 4 percent interest per year on your savings account, so that $1,000 grows to $1,040 over a one-year period. If prices increase by 1 percent per year over that time, approximately how much real value do you gain by keeping $100 in the bank for a year?

$0

$10

$30

$50

Question

Suppose your bank pays you 4 percent interest per year on your savings account, so that $1,000 grows to $1,040 over a one-year period. If prices increase by 1 percent per year over that time, approximately how much real value do you gain by keeping $100 in the bank for a year?

	
$0
	
$10
	
$30
	
$50

perl · Answer

do you have an online book on business math?

anonymous · Answer

so it is an exponential function

perl · Answer

so the prices increased by 1% , that means the value of a dollar is actually lower

awesome781 · Answer

ok how would you solve this?

perl · Answer

the question is, you want to keep 100 dollars in a bank for a year? then the interest is 4 dollars

awesome781 · Answer

is there any specific formula i have to follow?

awesome781 · Answer

@i0iz0gangster help meeee

i0iz0gangster · Answer

give me just one minute

whitemonsterbunny17 · Answer

Maybe @elementwielder can help c:

i0iz0gangster · Answer

am soo sorry am pooped here awesome

awesome781 · Answer

OMG i dont like this question  :/

awesome781 · Answer

@Compassionate @nincompoop @Zale101

triciaal · Answer

i don't remember much of this stuff
do you have present value/ future value table
principal = $100; time = 1 yr ; interest 1%

awesome781 · Answer

hmm i think since the price increasing the answer is between A and B