Answer:
The purchasing power of $24,035 if the inflation rate is five percent is $25300 .
Step-by-step explanation:
Let us assume that the purchasing power of $24,035 be y .
As given inflation rate is 5% .
(As inflation rate is inversely proportional to purchasing power .)
Assume that purchasing power be 100% .
Thus as inflation rate is increase by 5% than purchasing power decrease by 5 % .
Thus
Purchasing power = (100 - 5)%
= 95 %
95% is written in the decimal form .
[tex]=\frac{95}{100}[/tex]
= 0.95
Thus the equation becomes
0.95 × y = 24035
[tex]y = \frac{24035}{0.95}[/tex]
[tex]y = \frac{24035\times 100}{95}[/tex]
[tex]y = \frac{2403500}{95}[/tex]
y = $25300
Therefore the purchasing power of $24,035 if the inflation rate is five percent is $25300 .
