At a yearly rate of inflation of 4%, a dollar will have what specific value in 1 year?$0.96$1.04$1.05$0.95

1. ### Break Down the Problem

To find out the specific value of a dollar after one year with a 4% inflation rate, we need to apply the concept of inflation adjustment.

2. ### Relevant Concepts

The formula to adjust for inflation is given by:

$\text{Future Value} = \text{Present Value} \times (1 - \text{Inflation Rate})$

Where:

• $\text{Present Value} = 1 \, \text{dollar}$
• $\text{Inflation Rate} = 0.04$ (4%)

3. ### Analysis and Detail

Applying the formula:

$\text{Future Value} = 1 \times (1 - 0.04)$ $\text{Future Value} = 1 \times 0.96$ $\text{Future Value} = 0.96$

4. ### Verify and Summarize

The calculations show that after one year, considering 4% inflation, a dollar will have a value of $0.96.

Final Answer

The specific value of a dollar in 1 year at a 4% inflation rate will be $0.96.