Hello, Keith!

If the inflation rate is 100% per annum over a period ofnyears,

what is the purchasing power of a dollar at the end ofnyears

as a percentage of its purchasing power at the beginning of that period?

I worked out the math behind this problem,

. . but here's a baby-talk explanation.

If the inflation is 100% per year,

. . then an item costing $1 this year will cost $2 next year,

. . and $4 the next year, then $8 the next year . . .

In other words, the purchasing power iscut in halfevery year . . .

. . to ½ the first year, to ¼ the second year, etc.

At the end of thenth year, $1 will be worth only 1/(2^n) dollars.

As a percentage, the purchasing power is 100/(2^n) percent.