In "Flowers", a deeply rooted work, the loan relationship between Tao Tao and Ah Bao is not only a flow of money, but also a kind of emotional exchange and the epitome of the times. In 1987, Tao Tao lent Bao 6,000 yuan and 7,000 yuan successively, totaling 13,000 yuan. However, if we want to understand the value of this 13,000 yuan in today's society, we have to consider the time value of money.
The time value of money, in simple terms, is the increase in the value of money over time. Due to the influence of inflation, interest rates, etc., the purchasing power of money in the past is not the same as that of money in the present. Therefore, to estimate the current value of $13,000 in 1987, we need to refer to the inflation and interest rate data of previous years.
First, we need to clarify the rate of inflation from 1987 to the present. Historically, the average inflation rate in China over the past few decades has been around 3%-5%. Assuming that we estimate at an average annual inflation rate of 4%, what is the purchasing power of $13,000 in 1987 roughly equivalent today?
We can roughly estimate this value by using the compound interest calculation formula. At an annual interest rate of 4% and compound interest growth for 35 years (assuming 35 years so far), the purchasing power of 13,000 yuan is about equivalent to 41,272 yuan now. This means that if we keep this money in the bank and compound it at an annual interest rate of 4%, the money will increase to about 41,272 yuan after 35 years.
Of course, this is only a rough estimate, and actual purchasing power will be affected by other factors, such as the Consumer ** Index (CPI), exchange rate, etc. In any case, this value is far more than the original 13,000 yuan, showing the huge appreciation of the currency over time.
Returning to the context of "Flowers", the 13,000 yuan that Tao Tao lent to Bao in 1987 not only represents the deep affection between the two, but also reflects the socio-economic background of that era. When we look back at this period of history from today's perspective, we can deeply appreciate the importance of the time value of money to individuals and society.