Answer: D) $36,528.75
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Explanation:
Positive inflation eats away at the purchasing power of money.
If inflation is 4.5%, then the purchasing power goes down by 4.5% meaning his purchasing power is 100% - 4.5% = 95.5% of what it used to be.
95.5% of $38,250 = 0.955*38250 = 36,528.75
So his purchasing power is $36,528.75
