Question 1139393
 If prices increase {{{2}}}% each year for {{{10}}} years, then a jacket that costs ${{{90}}} today will cost ${{{109.71}}} in {{{10 }}}years. 

here is how:

Start amount:  ${{{90}}}
After {{{1}}} year: {{{1.02(90)}}}
After {{{2 }}}years:{{{ 1.02(1.02(90))}}}
After {{{3}}} years: {{{1.02(1.02(1.02(90)))}}} 

etc
so after 10 years: {{{1.02^10 * 90 = 109.7094977=109.71}}}

the difference in prices or price increase was:

{{{109.71-90=19.71}}}

and find what {{{percentage}}} is it of the {{{original}}} price

{{{(x/100)90=19.71}}}

{{{9x/10=19.71}}}

{{{9x=19.71*10}}}

{{{x=197.1/9}}}

{{{x=21.9}}}

so its percent increase is {{{21.9}}}%

=> percent increase in price= percent decrease in the buying power of currency
 
in your case, decrease in the buying power of currency over the 10-year period will be: {{{21.9}}}%

remember:

decrease in the buying power of currency- simply, inflation
the impact that inflation has on the time value of money is it decreases the value of a dollar over time
inflation increases the prices of goods and services over time, effectively decreasing the amount of goods and services you can buy with a dollar in the future as opposed to a dollar today