A person Just turned 21 years old If inflation is expected t

A person Just turned 21 years old. If inflation is expected to average 2.4% for the next 44 years, how much will $1 today be worth when this person retires at age 65?

Solution

The answer would be $0.33

Reason: Present value (PV) = $1, Future value (FV) =?

FV = PV/ (1+0.024)^44

       = 1/ (1.024)^44

       = 0.33