time value of money and inflation

Time Value of Money and Inflation

By: Max Rosenthal

Definitions

The Time Value of Money is the value of money figuring in a given amount of interest earned over a given amount of time.

Inflation is a rise in the general level of prices of goods and services in an economy over a period of time.

The 1950s to TodayITEM: Men's All Wool Suits The item cost $28.90 in

1950.

The item costs $379.00 today

It has gone up $350.10

That is a percent increase of 1211%

So the inflation is 1211%

The 1950s to TodayITEM: Ritz Crackers The item cost $0.32 in

1950.

The item costs $2.99 today

It has gone up $2.67

That is a percent increase of 834%

So the inflation is 834%

The 1950s to TodayITEM: Mechanical Adding Machine The item cost $3.98 in

1950.

The item costs $5500 today

It has gone up $5496.02

That is a percent increase of 138090%

So the inflation is 138090%

The 1990s to TodayITEM: Leather Bomber Jacket The item cost $99.99 in

1990.

The item costs $160.00 today

It has gone up $60.01

That is a percent increase of 6001%

So the inflation is 6001%

The 1990s to TodayITEM: Super Nintendo The item cost $159.00

in 1990.

The item costs $119.97 today

It has gone up $-39.03

That is a percent increase of -24%

So the inflation is -24%

The 1990s to TodayITEM: Snowboard The item cost $199.00

in 1990.

The item costs $59.00 today

It has gone up $-140.00

That is a percent increase of -70%

So the inflation is -70%

Questions: Calculating inflation over the past 60 years

helps us to understand the prices in the past decades and we have to pay so much more now.

Why is it important that people get raises? To keep up with the increase in prices

If you get a 2% raise every year, will you be able to keep up with inflation? Why or why not? No because the inflation goes up more than that

Conclusion: What I have learned(You must use the terms Time Value of Money and Inflation in your paragraph)

Over the past 60 years I’ve learned that the time value of money is the value of money figuring in a given amount of interest earned over a given amount of time. Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. Some prices increase a little and a lot.