Personal Finance & Money Asked by noobforever on December 3, 2020
I am trying to figure out the value of my $100 with a hypothetical 2% constant inflation rate after 30 years.
Here is the scenario: suppose I have $100 laying under my bed and the hypothetical inflation rate is constant at 2% for the next 30 years. I used an online calculator and here is the result:
Now my question is, after all these years and calculation what is the current value of my $100? In other words, how much value of that $100 is lost after all these years? (NOTE: I want the exact value or the percentage of value that I lost from $100 or the value that remains after 30 years of inflation [at the 2% rate].)
Your $100 at t=0
will be worth $55.2 thirty years hence.
Something that costs $100 today will cost 100*(1.02)^30 = $181 30 years later. So your original $100 can purchase only 100/181 worth of goods that it could purchase at t=0
. So its value after 30 years is $100 * 100/181 = $55 in t=0
dollars. So it will have lost 45% of its value in 30 years.
Correct answer by user2371765 on December 3, 2020
It's just 1-(100/181.14) = 44.79% Lost.
What remains is 100*(100/181.14) = $55.21
Answered by base64 on December 3, 2020
Took a look at generalising the answers others gave.
Turns out to find out how much your money has been eroded away to due to inflation is just a matter of using a negative value for time in the standard compound interest formula.
100*(1.02)^-30 = 55.21
Same answer as everyone else.
Answered by Rohan on December 3, 2020
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