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Consider the following? statement: "If you are 20 years of age and save? $1.00 each...

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Finance

Consider the following? statement: "If you are 20 years of age and save? $1.00 each day for the rest of your? life, you can become a? millionaire." Assume that you live to age 80 and that the annual interest rate is 11?%. Under these specific? conditions, we compute the future compound amount? (F): $1,735,599. If inflation is expected to average 4?% per year over the next 60? years, your purchasing power will be less than $1,735,599.

a. When f=4?% per? year, what is the purchasing power of this future sum of money in? today's dollars when you reach age? 80?

b. Repeat Part? (a) when inflation averages 2?% per year.

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