the graph shows the effect of inflation.\nthe effect of inflation on investments\n$12,000\n$10,000\n$8,000\n$…

the graph shows the effect of inflation.\nthe effect of inflation on investments\n$12,000\n$10,000\n$8,000\n$6,000\n$4,000\n$2,000\ninitial investment\n5 years\n10 years\n15 years\n20 years\n1% annual inflation\n3% annual inflation\napproximately how much of the initial investments value would be lost after 15 years at 3% inflation?\n15%\n20%\n40%\n50%

the graph shows the effect of inflation.\nthe effect of inflation on investments\n$12,000\n$10,000\n$8,000\n$6,000\n$4,000\n$2,000\ninitial investment\n5 years\n10 years\n15 years\n20 years\n1% annual inflation\n3% annual inflation\napproximately how much of the initial investments value would be lost after 15 years at 3% inflation?\n15%\n20%\n40%\n50%

Answer

Explanation:

Step1: Estimate initial and final values

From the graph, assume the initial investment is around $10000$ for 3% inflation line. After 15 years, the value is around $6000$.

Step2: Calculate value - loss percentage

The formula for percentage loss is $\text{Percentage Loss}=\frac{\text{Initial Value}-\text{Final Value}}{\text{Initial Value}}\times100%$. Substitute the values: $\frac{10000 - 6000}{10000}\times100%=\frac{4000}{10000}\times100% = 40%$.

Answer:

40%