Answer
$3.56\%.$
Work Step by Step
Use the given formula $A=P(1-r)^n$.
Here
$A=\$930$
$P=\$1000$
$n=2$years
where $P$ is the principal, the amount now, $r$ is the annual inflation rate, $n$ is the number of years, $A$ is the amount $P$ will be worth back after $n$ years
Hence
$\$930=\$1000(1-r)^2$, thus $(1-r)^2=\frac{930\$}{1000\$}=0.93$.
Solve the above equation to obtain: $\sqrt{(1-r)^2}=\sqrt{0.93}\\1-r=\sqrt {0.93}\\r=1-\sqrt{0.93}\\r=1-0.9644\\r=0.0356\\r\approx3.56\%.$
