You have $44,000 in a savings account that pays 2% annual interest and the inflation rate is 3.24%. how much buying power in dollars will you lose in one year because of inflation?

The effective annual interest rate would be the difference of nominal interest and inflation rate. ieff = 2% - 3.24% ieff = - 1.24% = -0.0124   Therefore the money left after 1 year would be: F = 44,000 * (1 – 0.0124) F = 43,454.4   So the amount of money lost is: lost = 44,000 - 43,454.4 lost = $545.6