The Impact of Inflation on a Fixed Pension Can Be

Multiple Choice

The impact of inflation on a fixed pension can be severe. If P represents the purchasing power (in dollars) of a $50,000 pension, then the effect of a 2.5% inflation rate can be modeled by the differential equation , where t is in years. Find the purchasing power of the pension after 35 years. Round to the nearest dollar. ​

A) $27,096
B) $25,012
C) $16,674
D) $31,265
E) $20,843