Ford Martinez
04/27/2023 · Middle School
(e) Feesty years ago, John deposited R5 000 in a bank paying him \( 3 \% \) per annun compound interes. The average inflation rate over the forty years was \( 6 \% \). (1) How much money will he have saved after forty years? (2) Calculate the buying power of R5 000 after forty years. (3) Comment on the value of John's savings affer forty years.
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1. John will have saved approximately R16,310.19 after forty years.
2. The buying power of R5,000 after forty years, considering inflation, is approximately R486.11.
3. John's savings have increased in nominal value but decreased in real value due to inflation.
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