Answer
${{\$}} 940.90$
Work Step by Step
Inflation: The amount A that ${{\$}} P$ can purchase after n years,
with annual inflation rate r (decimal) is $A=P\cdot(1-r)^{n}$
---
$P=1000,r=0.03,n=2$
$A=1000(1-0.03)^{2}={{\$}} 940.90$
College Algebra (10th Edition)
by Sullivan, Michael
Published by
Pearson
ISBN 10:
0321979478
ISBN 13:
978-0-32197-947-6
Chapter 6 - Section 6.7 - Financial Models - 6.7 Assess Your Understanding - Page 476: 57
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