The Impact of Inflation on a Fixed Pension Can Be

question 99

Multiple Choice

The impact of inflation on a fixed pension can be severe. If P represents the purchasing power (in dollars) of a $50,000 pension, then the effect of a 2.5% inflation rate can be modeled by the differential equation , where t is in years. Find the purchasing power of the pension after 35 years. Round to the nearest dollar. ​

• A)$27,096
• B)$25,012
• C)$16,674
• D)$31,265
• E)$20,843

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Definitions:

Discovery Learning

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The body's decreased response to a drug over time, requiring higher doses to achieve the same effect.

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A behavioral conditioning technique in which the continuous association of two stimuli results in a response that, although initially elicited by the second stimulus, is triggered by the first stimulus alone over time.

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